Iran warned could face sanctions

TEHRAN - The United States and Britain said today Iran could soon face sanctions because it showed no sign of halting sensitive nuclear work, while the EU said the latest talks had been helpful but had brought no breakthrough.

A senior Iranian atomic official said suspending uranium enrichment, which the West says Iran wants to use to build atomic bombs, would not solve the nuclear standoff.

The deputy head of Iran's Atomic Energy Organisation, Mohammad Saeedi, instead suggested France could invest in Iran's nuclear industry, enabling it to supervise Tehran's work.

Similar proposals for foreign investment in the past found no takers. The West has opposed plans that would keep enrichment on Iranian soil and allow Tehran to master the technology, which Iran says it wants so that it can generate electricity.

European Union foreign policy chief Javier Solana, who has been trying to coax Iran into halting enrichment, said a telephone conversation yesterday with Iran's nuclear negotiator Ali Larijani was constructive but had not broken the impasse.

"We still have some elements that need to be agreed. We will continue talking," Solana said, adding that the proposal for French monitoring was interesting but needed more analysis.

A French Foreign Ministry spokesman said there were no direct talks between Paris and Tehran and said the Larijani-Solana meetings were the forum for dialogue.

The United States, Russia, China, France, Britain and Germany have offered Iran economic and political incentives to halt enrichment. In its reply, Iran hinted at some flexibility over suspension but not as a precondition for talks.

US Secretary of State Condoleezza Rice said in Saudi Arabia there was no evidence Iran would halt enrichment.

"Should it not, then the only choice for the international community is to live up to the terms of resolution 1696 ... and that means to bring sanctions," she said.

A senior British official, who declined to be named, said world powers were preparing to draft UN sanctions against Iran as talks had failed so far to yield a deal. He said Solana had reported back that Larijani gave a clear "No" to suspension.

"We are intensifying preparatory efforts for what should be in a resolution," the official said.

Iran failed to suspend enrichment by an August 31 deadline set by the UN Security Council but US calls for swift moves towards sanctions have met resistance from some European states, keen for more talks, and opposition from Russia and China.

The secretary of Russia's Security Council, Igor Ivanov, said today negotiations should resolve the standoff.

"Russia believes that all the issues regarding Iran's nuclear case should be resolved through talks and is ready to give efforts to reach that point," he said after meeting Larijani in Tehran.

SHRUGGING OFF THE THREAT

Iran's stalling has been a cause of increasing frustration in Washington. But German Chancellor Angela Merkel said today the United States should not consider acting alone.

Iran has shrugged off the sanctions threat, which would probably start with modest penalties such as freezing assets or travel bans on officials. The world's fourth largest oil exporter feels it can cope with such steps.

President Mahmoud Ahmadinejad has insisted in recent days that Iran will not be deflected from its nuclear plans.

"The best solution to remove concerns about Iran's nuclear intentions is not to demand Iran suspend uranium enrichment activities," Saeedi told Reuters.

"France can create a consortium, like Eurodif and Areva, to produce enriched uranium in Iran," Saeedi said.

"Through such participation, they can also closely monitor our activities." French state-owned Areva owns Eurodif, Europe's largest uranium enrichment plant.

- REUTERS