1.

IRAN NUCLEAR THREAT INCREASES TRANSATLANTIC FRICTION
By Guy Dinmore (Washington), Daniel Dombey (Brussels), and Gareth Smyth (Tehran)

Financial Times (UK)
May 3, 2005

http://news.ft.com/cms/s/1cc5e7f0-bb63-11d9-911a-00000e2511c8.html

Iran's threat to resume nuclear enrichment-related activities has led to more friction between the three European governments negotiating with Tehran and the Bush administration, which refuses to join the talks, diplomats said on Monday.

Nevertheless, the so-called EU3 of France, Germany and the U.K. are in broad agreement with Washington that they would refer the crisis to the United Nations Security Council if Iran renewed production of uranium hexafluoride gas.

Negotiations between Iran and the EU3 stalled last Friday in London. On Monday night, on the sidelines of a New York conference to review the nuclear non-proliferation treaty, Joschka Fischer, Germany's foreign minister, warned Kamal Kharrazi, his Iranian counterpart, of the repercussions of a possible Iranian decision to end its agreed freeze of enrichment-related activities.

But policy differences between the U.S. and the EU3 emerged over the weekend in Washington. Senior European diplomats expressed their frustration to U.S. officials over Washington's refusal to take part in the negotiations with Iran, saying they could make no headway.

One U.S. official said the Bush administration was concerned that the EU would not live up to its tough rhetoric and tackle Iran at the U.N.

It is not clear if the western powers will seek to refer Iran immediately if the nuclear freeze is abandoned or wait several months until a new Iranian president is in place.

At present the Europeans are reluctant to force the issue to a crisis, just weeks before Iranian presidential elections scheduled for June 17.

Iran has always insisted that its nuclear program is wholly peaceful. Production of the gas yields the feedstock that can then be fed through centrifuges to give enriched uranium for use in reactors, or possibly for a nuclear bomb.

Western governments demand that Iran cease and dismantle its nuclear fuel cycle program. Iran has refused.

On Friday the EU refused to discuss Tehran's proposals to retain a small number of centrifuges under the supervision of the International Atomic Energy Agency. No new formal talks between the two sides have been scheduled.

Frustrated with a lack of progress and what it sees as a deliberate EU attempt to string out the talks, Iran has threatened to resume nuclear activities this week.

EU officials are not convinced the threat is genuine and see it as another attempt to bring the U.S. into the process. A source close to the administration said it was possible Iran would resume gas production this week.

The EU agreed in March that it would respond to such a move by backing referral of the case to the Security Council. In exchange the U.S., for the first time, extended limited incentives to Iran, including the sale of aircraft parts and allowing discussion of Iran's bid to start accession talks at the World Trade Organisation.

A European diplomat in Iran said it would not be “helpful” for the nuclear talks to become an election issue in the country. He suggested the EU needed to bear in mind the domestic pressures Iranian negotiators faced.

But Ayatollah Ali Khamenei, Iran's supreme leader, has vehemently rejected any link between the country's elections and the nuclear talks.

In a speech in Kerman on Sunday he denounced “spokesmen of the Arrogance” for saying “they would like to talk to Iran about the nuclear issue after thepresidential election,” and warned that the election was “nothing to do with them.”

2.

EU3 WARNS OF 'MANAGED CRISIS' OVER IRAN AMBITIONS
By Gareth Smyth (Tehran) and Daniel Dombey (Brussels)

Financial Times (UK)
May 1, 2005

http://news.ft.com/cms/s/8614f534-ba82-11d9-a27b-00000e2511c8.html

European officials have warned of a "managed crisis" in Europe's dialogue with Iran over the country's nuclear ambitions, after Iranian negotiators said they would consider resuming part of the uranium enrichment process suspended since 2003.

The meeting between the two sides in London on Friday "had a good atmosphere but was clear cut," said a senior European diplomat in Tehran.

He added: "The Iranian negotiators are trying to put pressure on Europe and, at the same time, they are responding to domestic crit ics of the process. They seem to want a managed crisis, or rather a crisis they think they can manage."

Both sides now suggest that for Iran and Europe to manage such a crisis and keep the process alive represents the stiffest challenge in the 18-month-old talks. A "managed crisis" would amount to a suspension in talks where both sides expect a resumption in the autumn but where, without resumption, some kind of escalation including perhaps a United Nations Security Council referral or even U.S.-Israeli strikes becomes more likely later in the year.

Iran's threat to resume part of its uranium enrichment was in reaction to a lukewarm response from representatives of the EU3 Britain, France and Germany to a framework proposal for future talks submit ted by Tehran in March, after the Europeans demanded "objective guarantees" from Iran that its nuclear program was peaceful.

"We said we would continue to examine Iran's suggestions but we could not treat them as the basis for working towards an agreement, because we couldn't put the end-game first," said the European diplomat.

Iran said it might resume converting raw uranium into gas, an early part of the process of enriching uranium, and so end the suspension of all enrichment-related activities it began as a gesture of "goodwill" in 2003 to help talks on nuclear, political, security and trade issues.

"I'd say it was 99 per cent likely Iran will restart [some activity]," said an Iranian diplomat close to the talks. "We have decided it cannot go on like this any more."

But the European diplomat said Iran was risking "brinkmanship" that might undermine the negotiations. "For Iran to resume conver sion would be to renege on the Paris agreement [reached between the EU3 and Iran in November 2003] which clearly involved Iran continuing suspension as long as talks continued."

On Saturday, Iran announced it might resume conversion within days at its Isfahan facility. Hassan Rowhani, Iran's top security official, stressed "this decision doesn't mean a resumption of uranium enrichment, and is only the start of some preliminary nuclear activities".

Mr. Rowhani said talks had made "good progress [with] a convergence of opinions" although there were "some disagreements about the tim ing of activities."

Both the Europeans and Condoleezza Rice, the U.S. secretary of state, have spoken of the autumn as the cut-off for the process, even if the EU3 suspends talks in response to Iran resuming conversion.