Al Jazeera reported Friday that Iran had rejected as "unacceptable" the EU3 proposal concerning its nuclear program.[1]  --  "EU officials have called for an emergency meeting of the International Atomic Energy Agency, (IAEA), which could send Iran's nuclear file to the U.N. Security Council for possible sanctions," Al Jazeera reported, but top Iranian nuclear negotiator Hossein Moussavian said yesterday that "if EU negotiators called an IAEA meeting, Iran may not keep its freeze on enrichment at the Natanz plant."  --  Earlier the Financial Times of London had reported that diplomats were resigned to the rejection of the proposal that they were set to offer Iran.[2]  --  "A senior European diplomat in Tehran conceded that the 'proposal is not the one Iranians want,'" the FT reported.  --  Voice of America reported that the IAEA in Vienna would hold an emergency session for Tuesday to address the Iranian question.[3]  --  According to VoA's Marlene Smith, "Diplomats say the board's emergency session aims to make Tehran understand that its defiance could result in an escalation of the dispute.  But they say it's unlikely the board will agree to refer Iran to the Security Council.  --  According to diplomats, the board may agree, however, to send the case to the Security Council at its next regular meeting in September if Iran continues to defy IAEA rules." ...

1.

Middle East News

IRAN REJECTS 'UNACCEPTABLE' EU NUCLEAR PROPOSALS

Al Jazeera
August 5, 2005

http://www.aljazeera.com/cgi-bin/news_service/middle_east_full_story.asp?service_id=9356

Iran rejected a package of economic and technology incentives offered by the European Union to end its nuclear program.

"The proposals are unacceptable," top nuclear negotiator Hossein Moussavian said, describing them as a "clear violation" of agreements between Tehran and the EU.

"They negate Iran's inalienable right," he added.

EU officials have called for an emergency meeting of the International Atomic Energy Agency, (IAEA), which could send Iran's nuclear file to the U.N. Security Council for possible sanctions.

But Moussavian said Iran's decision to resume uranium enrichment at its Isfahan plant was "irrevocable" despite the threat of possible U.N. sanctions.

He also warned Thursday that if EU negotiators called an IAEA meeting, Iran may not keep its freeze on enrichment at the Natanz plant.

On the other hand, the European Union said Iran must commit "not to pursue fuel cycle activities" if it wants to benefit from the EU incentives.

The set of proposals, presented by ambassadors from Britain, France, and Germany, covers nuclear, political, and security issues, and offers trade and technological cooperation.

The EU said it reaffirmed "Iran's inalienable rights to the peaceful use of nuclear energy, exercised in conformity with the nuclear Non-Proliferation Treaty," but also wants it to abandon sensitive nuclear activities.

An EU letter "offered to supply nuclear reactor fuel as well as security, technology, and trade guarantees in return for Iran dropping parts of its nuclear program that could be used to build atomic bombs."

"As Iran will have an assured supply of fuel over the coming years, it will be able to provide the confidence needed by making a binding commitment not to pursue fuel cycle activities other than the construction and operation of light water power and research reactors," the EU letter said, referring to less-sensitive nuclear activities.

It also stated that building a heavy-water reactor in the city of Arak "gives rise to proliferation concerns" and that Iran should terminate the project.

The three EU states are said to have offered recognition of Iran's right to produce nuclear power, as well improved trade ties with the EU, and guarantee of alternative nuclear fuel sources from Europe and Russia.

In exchange the EU wants Tehran to stop nuclear enrichment and construction of a heavy-water reactor.

The package was submitted after nine months of negotiations between the so-called EU "big trio" and Iran, which voluntarily agreed in November to freeze uranium enrichment.

The offer comes days after Iran's new President Mahmood Ahmadinejad took office, raising international concerns about the future of the country's foreign and nuclear policies.

The United States accuses Iran of covertly developing an atomic weapons project. But Iran denies the U.S. claims and insists that its nuclear plans are strictly for the peaceful generation of electricity and that it has a right to enrich uranium under the NPT.

Earlier, French Foreign Minister Philippe Douste-Blazy said the world will face a "major international crisis" if Iran rejects the proposals. "I hope Iran will heed the voice of reason."

But if the Islamic republic decides to resume enrichment, "then it is certain that the international community will ask the Security Council to intervene," he said.

2.

World

Middle East & Africa

TEHRAN HEADS FOR CLASH WITH EU
By Najmeh Bozorgmehr (Tehran), Guy Dinmore (Washington), and Raphael Minder (Brussels)

Financial Times (UK)
August 5, 2005

http://news.ft.com/cms/s/bc1fdc16-05d7-11da-883e-00000e2511c8.html

Nearly two years of delicate negotiations between Iran and the European Union over the Islamic republic's nuclear program could be on the point of collapse on Friday, setting the scene for a confrontation at the U.N.

Senior Iranian officials told the Financial Times that talks with France, Germany, and the UK -- the EU3 -- would be over if their latest proposed incentives do not give approval for Tehran to resume work at a key facility at Isfahan.

Ambassadors of the EU3 were expected formally to deliver the package of proposed incentives to Tehran's foreign ministry early on Friday.

However, one senior official involved in the talks said that: "According to our information the EU proposal does not include resumption of conversion activities in Isfahan."

The official added: "This means the end of this round of talks with Europe. Iran has decided to resume activities in Isfahan and no one at home and abroad can stop it."

A senior European diplomat in Tehran conceded that the "proposal is not the one Iranians want."

Under the Paris Agreement reached with the EU3 last year, Iran suspended nuclear fuel cycle activities that western governments suspect are part of a clandestine weapons program.

The suspension agreed in Paris included processing work at Isfahan, where raw uranium is converted into uranium hexafluoride gas, and the next stage at Natanz where the gas is enriched through centrifuges to provide nuclear fuel.

The EU3, backed by the U.S., have warned Iran that ending any part of the suspension would lead them to refer the issue to the U.N. Security Council.

The U.S. drive for punitive action is being led by John Bolton, the new U.S. ambassador to the UN, who failed to win confirmation by the Senate but was still appointed by President George W. Bush.

Some analysts and diplomats are sceptical the Bush administration can win enough support for serious measures to be taken against Iran.

"The American case will be represented by a non-confirmed ambassador who has been accused of distorting intelligence on proliferation issues," commented Ray Takeyh, analyst at the independent U.S. Council on Foreign Relations.

The EU3 is seeking an extraordinary board meeting of the International Atomic Energy Agency in Vienna on Monday. But diplomats do not rule out further talks with Iran.

One EU3 diplomat said the European Union and the U.S. were "on their way" to getting a majority on the IAEA board to take Iran to the Security Council, using the argument that Iran had deceived the U.N. watchdog for years over its nuclear program and had been in breach of its safeguards commitments.

Iran insists that its nuclear program is for civilian use only and that it has a right under the Nuclear Non-Proliferation Treaty to develop the nuclear fuel cycle.

Senior Iranian officials said Iran was not bluffing over its threat to reactivate Isfahan as some EU3 diplomats suspect. "We are serious and also upset about Europeans' failure to deliver promises," said one Iranian.

However, the officials said Iran had not decided finally when to break IAEA seals at the facility. While members of the negotiating team want Iran to wait for inspectors from the IAEA to come and monitor, other hardline decision-makers "who now have the upper hand" want an immediate start.

They accused the IAEA of playing for time by saying it needs to send more equipment and said it was possible that Isfahan could "go on stream" this weekend, possibly with foreign reporters present.

3.

IAEA CALLS SPECIAL SESSION ON IRAN'S NUCLEAR PLANS
By Marlene Smith

Voice of America
August 5, 2005

http://www.voanews.com/english/2005-08-05-voa29.cfm

The U.N. nuclear agency said Friday it will hold an emergency executive meeting next week to persuade Iran to continue negotiations with European powers on an incentive package aimed at getting Iran to halt some of its nuclear activities. The meeting comes as Tehran is threatening to restart processing of some nuclear materials.

IAEA spokeswoman Melissa Fleming said the 35-nation board is acting at the request of Britain, France and Germany, the three countries negotiating a deal to induce Iran to scale back its nuclear ambitions.

"Three countries of the EU have called for a special session of the board of governors and it's now scheduled for next Tuesday and the topic will, of course, be Iran," she said.

The three European powers took this unusual step after Iran declared it would defy an agreement with them and resume uranium processing. Tehran then agreed to a delay to enable IAEA inspectors to get equipment up and running to monitor the activities, but insisted the work would go ahead.

The last time the IAEA called an emergency session was two years ago after its inspectors were forced out of North Korea by the communist regime. The IAEA board decided then to send the matter to the U.N. Security Council where it is still pending.

Many members of the IAEA board oppose giving Iran an ultimatum and instead want inspectors to continue verifying Tehran's nuclear program that was kept secret for decades.

The United States maintains Iran has been hiding a nuclear weapons program, and, along with Canada and other countries, backs the idea of sending the Iran nuclear file to the Security Council for possible sanctions.

But other nations represented on the IAEA board, including Brazil, India and Pakistan, are more sympathetic to Iran's claim that it has a right to the peaceful development of nuclear technology.

The European Union countries prefer to negotiate with Tehran and they have offered incentives, such as sharing nuclear power-generation technology, to make sure Iran does not develop an atomic weapon. The three countries have drawn up a sweeping new package to induce Iran to cooperate.

But Iran has become impatient with the slow pace of the negotiations and threaten to resume some nuclear activities that it had agreed to suspend.

Diplomats say the board's emergency session aims to make Tehran understand that its defiance could result in an escalation of the dispute. But they say it's unlikely the board will agree to refer Iran to the Security Council.

According to diplomats, the board may agree, however, to send the case to the Security Council at its next regular meeting in September if Iran continues to defy IAEA rules.