1.

World/UK

Middle East

IRAN TALKS LIKELY TO FAIL, SAY EU DIPLOMATS
By Daniel Dombey

Financial Times (UK)
June 30, 2005

http://news.ft.com/cms/s/c25f7334-e903-11d9-87ea-00000e2511c8.html

BRUSSELS -- European diplomats are preparing for a breakdown of their negotiations over Iran's nuclear program in a sign of mounting pessimism following the election last week of conservative president Mahmoud Ahmadi-Nejad.

Although Britain, France, and Germany still intend to keep their promise to put forward new compromise proposals to Iran by the beginning of August, some of the countries' diplomats now have little expectation that any deal will be accepted by Tehran.

The focus of efforts by the so-called "EU3" will be to win the ensuing "blame game" should the talks collapse. A priority will be to put forward proposals that go just far enough in meeting Tehran's concerns that they will allow Iran to be blamed if they are rejected.

The proposals are likely to include guarantees of nuclear fuel supply for Iran (if the technical details can be worked out); offers of technical assistance similar to a 1990s agreement between the U.S. and North Korea; and encouragement of contacts between Iran and neighboring countries in an attempt to defuse Tehran's security concerns.

But similar ideas have not been acceptable to Tehran in the past. "It is not exactly as if these will be completely new proposals, but they will be much more detailed and global," said a French diplomat.

A difficult foreign ministers meeting in Geneva last month cast light on the gulf between the two parties. Iran insists its nuclear program is wholly peaceful, while the EU3 say Iran's record of concealment means it should suspend activities related to uranium enrichment, which can create weapons-grade material.

The three European countries say their attempt to solve the issue through negotiation has kept the international community unified while putting a hold on the Iranian program, since Tehran agreed to freeze enrichment activity in an agreement last year in Paris.

But some diplomats concede the freeze may help Iran mollify its critics, while international unity is looking tenuous. China is strengthening its ties with Tehran, while the U.S. has stepped up its rhetoric against the Islamic republic.

EU officials say they are aware that Mr. Ahmadi-Nejad will not have a decisive role to play in formulating nuclear policy, but are nonetheless pessimistic on how his victory will influence Washington's attitude towards the talks. Some believe it will reduce U.S. support for negotiations, and several say Washington's support for negotiations has already noticeably declined.

"It may now be more difficult for the Europeans to convince the Americans to go further in helping out," said one EU official.

If the Iranians reject the EU3 proposals and resume their program, breaking the Paris agreement, the EU will push for a series of resolutions at the International Energy Agency, [the] United Nations nuclear watchdog, and ultimately the U.N. Security Council itself, officials said.

At first, such resolutions would call on Iran to freeze activity once again, while ultimately they would try to give the Paris agreement -- and the suspension of uranium enrichment -- the force of international law. "The first step will have to be the IAEA," said another European diplomat. "The basis for initial discussion in both the IAEA board and also the U.N. Security Council, if it gets there, will inevitably be the Paris agreement."

It is far from certain that the EU3 would win a consensus on the 35-member IAEA board, which includes such countries as China, Russia, and Venezuela. Some European officials also believe Iran would try to escape censure by resuming its nuclear program in a piecemeal fashion at first.

One fear is that such a diplomatic impasse could encourage hawks in the U.S. or Israel to argue for airstrikes against Iran -- an outcome the EU3 desperately want to avoid.

2.

World/U.S.

U.S. THREATENS FINES OVER IRAN NUCLEAR AGENCY
By Guy Dinmore and Edward Alden

Financial Times (UK)
June 29, 2005

http://news.ft.com/cms/s/ad442242-e8d6-11d9-87ea-00000e2511c8.html

WASHINGTON -- The U.S. is threatening severe financial penalties against any foreign companies or individuals that do business with the government agency that operates Iran's civilian nuclear program, a move that could open new rifts among the U.S., Russia, and Europe over how to deal with the nuclear threat posed by Iran.

President George W. Bush on Wednesday issued an executive order freezing all U.S. assets of eight organizations in Iran, North Korea, and Syria deemed to be involved in weapons proliferation, including the Iranian government's Atomic Energy Organization of Iran (AEOI).

While most of the targeted organizations are already under U.S. sanctions, the order provides a powerful tool to force other countries to stop all dealings with these and other entities designated as “proliferators” by Washington. The provision, modeled after those used to curb financial support for terrorist groups, gives the Treasury secretary new powers to freeze assets and block all U.S. transactions of foreign companies deemed to have provided any support for the sanctioned organizations. “The point is to isolate and cut these organizations off from the U.S. financial system,” said a Treasury official.

The AEOI is an executive agency of the Iranian government in charge of all aspects of the nation's civilian nuclear program, which the U.S. alleges is a cover for weapons development. Russia is contracted to the organization for the construction of a nuclear power plant at Bushehr in southern Iran, while Chinese and other nationals have helped the AEOI with development of Iran's nuclear mines. The International Atomic Energy Agency, the U.N. nuclear agency, assists it with missions and expertise. Its scientists attend international conferences.

A White House official indicated the sanctions would not be used to stop Russia's construction of the Bushehr reactor. Under the deal with Iran, Russia will supply nuclear fuel for the reactor and take it away for reprocessing. The U.S. official noted the “timing and scope” of the measures were discretionary. He also said the sanctions would only involve “assets of an entity flowing through the U.S. back to AEOI.”

Asked about the possible impact on negotiations with the EU3 -- France, Germany, and the UK -- the official said: “We hope the EU3 negotiations will produce a result that takes AEOI out of the proliferation business through the cessation and dismantlement of its enrichment related and reprocessing programs.”

European diplomats in Washington were seeking clarification of the measures, saying they had not been consulted. They expressed concern over the consequences of extra-territorial sanctions and the possible impact on negotiations held by France, Germany, and the U.K. with Iran on its suspected nuclear weapons program.

Patrick Clawson, senior analyst with the Washington Institute for Near East Policy, described the executive order as an “assertive policy stance” aimed at restricting Iran's entire nuclear industry.

3.

World

RUSSIA REBUFFS CRITICISM ON ITS NUCLEAR COOPERATION WITH IRAN

Xinhua
June 30, 2005

http://english.people.com.cn/200506/30/eng20050630_193159.html

Russian Foreign Minister Sergei Lavrov Wednesday lashed out against assertions that Russia is helping Iran acquire nuclear weapons, the Interfax news agency reported.

"All assertions that Russia is facilitating the acquisition of nuclear weapons by Iran are absolutely unfounded," Lavrov said in an interview with the Lebanon-based al-Watan al-Arabi magazine.

"Russia and Iran so far have no other nuclear energy projects except the Bushehr nuclear power plant," Lavrov said, emphasizing that according to a fuel supply deal signed by Moscow and Tehran earlier this year, Iran must return the plant's spent nuclear fuel to Moscow.

"Our cooperation with Iran, which is under the supervision of the International Atomic Energy Agency, is absolutely transparent, " Lavrov said.

Asked whether Moscow agrees with allegations that Iran will acquire a nuclear bomb in the next few years, the top Russian diplomat answered: "The question is incorrect."

"If we knew that Iran had such a plan, we would never cooperate with them in the nuclear sector," he said.

The United States has accused Iran of using a civilian atomic energy program as a cover to seek nuclear weapons and pushed for Tehran's nuclear case to be referred to the U.N. Security Council.

Iran has categorically denied the charge, insisting that its nuclear research is only for peaceful purposes.

Being built with Russian help in Iran's southern port city of Bushehr, Iran's first nuclear power plant is slated to begin operations in late 2006 and will generate 1,000 megawatts of electricity.

4.

World News

U.S. AND RUSSIA CLASH OVER IRAN NUCLEAR PLANTS
By Jeremy Page

Times (UK)
June 29, 2005

http://www.timesonline.co.uk/article/0,,3-1674093,00.html

MOSCOW -- Russia and the United States appeared to be on a collision course over Iran today after Moscow announced that it wanted to help Tehran’s new leadership to build six more nuclear plants.

The announcement followed reports this week that the Bush administration was considering imposing sanctions on Russian and other companies suspected of helping weapons programs in Iran, Syria or North Korea.

Washington and Moscow have long been at odds over the involvement of AtomStroiExport and other Russian companies in constructing an $800 million, 1,000-megawatt nuclear reactor at Bushehr in southern Iran.

But tensions have escalated since the election of the conservative Mahmoud Ahmadinejad as Iran’s President, setting the stage for a tense confrontation at the G8 summit in Gleneagles next month.

Russia’s Foreign Minister, Sergei Lavrov, rejected U.S. allegations that energy-rich Iran was using its nuclear energy program as a cover to produce a nuclear bomb. "If we knew that Iran had plans of this kind, we would never have started cooperating with it in the nuclear sector," he said in interview with the al-Watan al-Arabi Arab weekly, a copy of which was posted on the Russian Foreign Ministry website.

"All assertions that Russia is allegedly facilitating the acquisition of nuclear weapons by Iran are absolutely unfounded."

In Moscow, the Federal Atomic Energy Agency chief, Aleksander Rumyantsev, said that Russia wanted to bid for contracts to build more reactors in Iran. "When Tehran announces new tenders to construct nuclear reactors, we’ll take part in them," he said. "Tehran intends to build another six nuclear reactors." He said the first power unit at Bushehr would be ready by 2006.

Analysts said that Russia was keen to establish good relations with the new Iranian leadership, to protects its status as an intermediary between Tehran and Washington, and to avoid losing out to competition from Europe. Britain, France, and Germany have been negotiating a deal with Iran that would recognize its rights to develop nuclear energy for peaceful purposes and allow it greater access to international markets.

Mr. Ahmadinejad has said that Tehran is determined to press on with its nuclear program while continuing talks with the Europeans.

Konstantin Kosachyov, head of the Duma’s committee for international affairs, reacted angrily to Washington’s reported threat to target the U.S. assets of Russian firms suspected of helping Iran’s weapons program.

He said: "Russia should demand that the U.S. partners produce comprehensive proof . . . If they fail to offer the data we will once again have to conclude that the U.S. resorts to sanctions, firstly, as an instrument of pressure on disagreeable regimes, and secondly, as an instrument of dishonest competition against Russian companies."

U.S. sanctions on Iran have also had an unintended consequence for cooperation in space between Washington and Moscow. With the shuttle fleet grounded, NASA must start paying to use Russian rockets to service the International Space Station from April next year, but is not allowed to under the Iran Non-Proliferation Act.

NASA’s chief, Michael Griffin, was forced to ask Congress this week to ease the law, which bans U.S. entities from paying for transportation services from countries helping Iran’s weapons program.

5.

'UNHAPPY LOVE AFFAIR EXPLAINS RICE VIEW ON IRAN'

Iranmania
June 30, 2005

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=33015&NewsKind=Current%20Affairs

LONDON -- Perplexed by the vitriol of U.S. Secretary of State Condoleezza Rice's attacks on Iran, one lawmaker believes he has uncovered the secret of her enmity -- that she was spurned by an Iranian boyfriend at college, according to ISNA.

"The reason that the U.S. secretary of state attacks Iran is because she had her heart broken by a young man from Qazvin while they were students," a confident Shokrollah Attarzadeh was quoted by the ISNA agency as saying.

Somewhat mysteriously, he added: "This is the result of an investigation by a woman MP, who cannot be named."

Qazvin is an unremarkable city 150 kilometers (90 miles) from Tehran, hitherto not known for playing a major role Iran-U.S. relations, which have been frozen for a quarter of a century.

Attarzadeh did not offer any other details on the alleged affair or, for that matter, any interesting new proposal on how ties between the two arch-enemies could be warmed up.

Surprising as it may be, amorous explanations for diplomatic machinations are nothing new here.

It was rumoured last year that German Foreign Minister Joschka Fischer hardened his tone towards Iran after acquiring a girlfriend who supports the exiled opposition.

The alleged leniency of International Atomic Energy Agency director Mohammad ElBaradei towards Iran's nuclear program has also been explained by . . . him having an Iranian wife.