In a surprising development late Monday that must have U.S. Ambassador to the U.N. John Bolton yelling insults and hurling tape dispensers, a complex proposal to resolve the Iranian stand-off has emerged, raising the prospect of the IAEA meeting scheduled for Mar. 7 being postponed.  --  "Under the emerging deal, Iran would declare a moratorium on most uranium enrichment, and would instead receive slightly enriched uranium suitable for civilian usage from Russia," Haaretz reported early Tuesday.  "However, it would be allowed to continue operating a cascade of some 20 centrifuges that it restarted at its Natanz facility about two months ago.  --  Such a small cascade would make it virtually impossible for Iran to enrich sufficient uranium for a nuclear weapon."[1]  --  "Nevertheless," Yossi Melman and Amos Harel wrote early Tuesday, "many experts, especially in Israel, argue that allowing Iran to operate even a small cascade would enable it to work out all the technical bugs of uranium enrichment, after which it could begin large-scale production in secret."  --  Haaretz suggested such an arrangement might be acceptable to the United States, but a New York Times account left a very different impression:  "The reports of the proposal prompted Secretary of State Condoleezza Rice to call Mohamed ElBaradei, the director of the International Atomic Energy Agency, and according to an administration official who was briefed on the conversation, 'she said the United States cannot support this.'"[2]  --  The Times characterized the matter as a Russia-West "split" and the tone of its article implied annoyance at Russian underhandedness: "American officials said they had been assured by the Russians that there was no formal proposal on the table.  The Russian foreign minister, Sergey V. Lavrov, had dinner in Washington on Monday evening with Ms. Rice and the national security adviser, Stephen Hadley, and he is scheduled to meet President Bush in the Oval Office on Tuesday. . . . The Russian proposal is a reversal of its previous stance and seemed motivated by its determination to protect Iran from judgment by the Security Council," Elaine Sciolino wrote.  --  The Times of India, unable to arrive at a view on what is happening amid this intense and fluid diplomacy, on Tuesday morning called the story of Iran's nuclear program "a saga increasingly shrouded in confusion."[3]  --  The Guardian (UK) called the new flurry of discussions a "last-ditch attempt to find a formula to end the dangerous standoff."[4]  --  Ian Traynor reported that key players were emitting contradictory accounts:  "While U.S. and European officials insisted no talks were taking place with Iran, senior officials close to the IAEA said the opposite and that Germany, France, and Russia were keen to explore Iranian proposals." ...

1.

IRAN, E.U. ON VERGE OF DEAL OVER NUCLEAR PROGRAM
By Yossi Melman and Amos Harel

Haaretz
March 7, 2006

http://www.haaretzdaily.com/hasen/spages/691182.html

Tehran and the European Union appear poised to reach an agreement on Iran's nuclear program that would obviate the need for sanctions, diplomats affiliated with the International Atomic Energy Agency told Haaretz on Monday night.

But a senior Israeli defense official was skeptical about the tentative agreement, saying it appeared to be just another Iranian effort to buy time to advance its nuclear program.

Under the emerging deal, Iran would declare a moratorium on most uranium enrichment, and would instead receive slightly enriched uranium suitable for civilian usage from Russia. However, it would be allowed to continue operating a cascade of some 20 centrifuges that it restarted at its Natanz facility about two months ago.

Such a small cascade would make it virtually impossible for Iran to enrich sufficient uranium for a nuclear weapon. Nevertheless, many experts, especially in Israel, argue that allowing Iran to operate even a small cascade would enable it to work out all the technical bugs of uranium enrichment, after which it could begin large-scale production in secret.

Thus, the proposal still enables Tehran to move forward with its nuclear program, the senior Israeli official said, and therefore, Israel would prefer to see the U.N. Security Council impose sanctions.

Until recently, this was also the European and U.S. position: Last Friday, when an Iranian negotiator raised a virtually identical proposal at a meeting with senior French, British, and German officials, the Europeans, backed by the U.S., rejected it.

The EU said that Iran must completely cease uranium enrichment, while Larijani said that Iran would accept a temporary moratorium on large-scale enrichment, but insisted on being allowed to proceed with research into the enrichment process.

Now, however, the Europeans and United States appear to have reversed themselves. At the opening session of the IAEA's board of governors' meeting Monday, agency director general Mohamed ElBaradei said that he was very hopeful that an agreement would be reached in the coming week, and even U.S. officials struck an unusually conciliatory note on Iran in their briefing for reporters Monday.

The board is scheduled to discuss Iran's nuclear program on Tuesday. In light of the negotiations, however, this discussion may be postponed.

2.

International

RUSSIA AND WEST SPLIT ON IRAN NUCLEAR ISSUE
By Elaine Sciolino

New York Times
March 7, 2006

http://www.nytimes.com/2006/03/07/international/europe/07iran.html

[PHOTO CAPTION: Mohamed ElBaradei, director of the I.A.E.A., shown in Vienna Monday, is trying to resolve the standoff over Iran's nuclear program.]

VIENNA -- A serious rift emerged Monday when Russia split with the United States and Europe over Iran's nuclear program after the Russians floated a last-minute proposal to allow Iran to make small quantities of nuclear fuel, according to European officials.

The reports of the proposal prompted Secretary of State Condoleezza Rice to call Mohamed ElBaradei, the director of the International Atomic Energy Agency, and according to an administration official who was briefed on the conversation, "she said the United States cannot support this."

Ms. Rice's call came after Dr. ElBaradei suggested to reporters that the standoff with Iran could be resolved in a week or so, apparently an allusion to the Russian proposal. Washington's strategy is to get past the meeting of the I.A.E.A. that opened Monday and, under a resolution passed by the agency's board in February, have the issue turned over to the United Nations Security Council immediately. But officials clearly fear that the Russian proposal is intended to slow that process.

American officials said they had been assured by the Russians that there was no formal proposal on the table. The Russian foreign minister, Sergey V. Lavrov, had dinner in Washington on Monday evening with Ms. Rice and the national security adviser, Stephen Hadley, and he is scheduled to meet President Bush in the Oval Office on Tuesday.

Under the Russian proposal, Iran would temporarily suspend all uranium enrichment activities at its facility at Natanz but then be allowed to do what Russia describes as "limited research activities" in Iran's uranium enrichment program, said the European officials, who spoke on condition of anonymity under normal diplomatic rules.

Iran would have to agree to a moratorium on production of enriched uranium on an industrial scale for between seven to nine years, ratify additional measures that let the nuclear agency conduct intrusive inspections of its nuclear facilities, and create a joint venture with Russia on the production of enriched uranium on Russian soil, the officials said. The proposal, which has not been made public, spurred Dr. ElBaradei to give an upbeat assessment about a possible swift resolution of the impasse over Iran's program, an official familiar with his thinking said.

In a tonal shift, Dr. ElBaradei said Iran had made concessions on some issues. Calling Iran's activities at its uranium enrichment plant at Natanz "the sticking point," he added, "That issue is still being discussed this week, and I still hope that in the next week or so that agreement could still be reached."

In an interview on Monday evening, R. Nicholas Burns, the under secretary of state for political affairs, said the administration would reject any proposal that did not require the Iranians to stop domestic nuclear enrichment and reprocessing activities. "The United States will not support any halfway measures," he said. "That means full suspension of all nuclear activities, and a return to negotiations on that basis."

Ms. Rice told Dr. ElBaradei that Washington wanted to see Iran's case before the Security Council as soon as this week's agency board meeting was over; that the United States would seek a presidential statement, which does not carry the weight of a resolution, noting Iran's past failures to comply with its international commitments; and that Iran's case would then be sent back to the nuclear agency for further review, according to an official with knowledge of the conversation.

The Russian proposal is a reversal of its previous stance and seemed motivated by its determination to protect Iran from judgment by the Security Council.

Russia -- and even China -- had joined the United States and the Europeans in demanding that Iran resume a freeze of uranium enrichment activities at Natanz, reflecting mounting global suspicion that Iran's nuclear program is intended to produce weapons.

The Russian proposal surfaced late last week, when Sergei Kisliak, Russia's chief nuclear negotiator, presented it to officials of Britain, France, and Germany.

He said Iran would have to resume full suspension of all enrichment-related activities, including what it calls its small-scale "research and development," while the agreement on the package was negotiated. Once there was an agreement, however, Iran would be allowed to conduct limited uranium enrichment research activities under a pilot program as agreed with the I.A.E.A.

As soon as Iran and the agency agreed on the small-scale enrichment, Iran's Parliament would ratify the "Additional Protocol" to Iran's nuclear agreement. That protocol gives the nuclear agency's inspectors the right to ask for exceptional access to Iran's nuclear facilities. When one of the Europeans asked Mr. Kisliak for his definition of a pilot program, he said there was no real definition, one official said.

A moratorium on industrial-scale enrichment and reprocessing activities would last two to three years while the nuclear agency carried out an investigation of Iran's past nuclear activities and five to six years more until trust with Iran could be rebuilt.

Mr. Kisliak conceded that a major risk of such a package was that Iran would inch closer to mastering the technology for a small cascade of centrifuges that turn uranium gas into enriched uranium that can be used to produce electricity or to make bombs. He added that it would shorten the period needed for Iran to "manufacture a weapon" by a number of months, one official familiar with the briefing said.

Iran has always contended its nuclear program is for peaceful purposes, although Russia, like the United States and the Europeans, is convinced it intends to make nuclear weapons.

Mr. Kisliak speculated that Iran was unlikely to accept the proposal, in part because of the long-term constraints on its industrial-scale enrichment program. The proposal threatened to derail a carefully formulated, but fragile strategy to send Iran's case to the Security Council. Last month's resolution by the nuclear agency board demanded that no action be taken in the Council until after the current board meeting, a way to give Iran one last chance to comply with agency demands.

Even though there is no specific timetable to seek economic sanctions on Iran, both Russia and China are opposed to sanctions. There is no need for another resolution to be passed by the agency board this time for the Security Council to act. Certainly, Dr. ElBaradei is looking for a negotiated solution to the Iran impasse even if it means giving Iran a significant concession on making nuclear fuel.

In a conversation with the German and French foreign ministers, a senior British Foreign Office envoy and the European Union's foreign policy chief, Javier Solana, in Vienna last Friday, Dr. ElBaradei expressed the view that Iran needed to continue some uranium enrichment work as a face-saving measure, a European official said. The Europeans, who met earlier with Iran's chief nuclear negotiator, Ali Larijani, replied that it was not a question of saving face but of maintaining both the credibility of the nuclear agency and a firm position toward Iran.

The crucial issue for Iran is mastering the fuel cycle by enriching uranium. Indeed, in Tehran on Sunday, Mr. Larijani reiterated Iran's position that it would not freeze small-scale production of nuclear fuel even if its case came before the Security Council.

--David E. Sanger contributed reporting from Washington for this article.

3.

World

Rest of world

CONFUSION SURROUNDS IAEA MEET ON IRAN NUKE CRISIS

Times of India
March 7, 2006

http://timesofindia.indiatimes.com/articleshow/1440733.cms

VIENNA -- The International Atomic Energy Agency (IAEA) is set to discuss Iran's nuclear program Tuesday, but all indicators before the meeting point towards no further developments in a saga increasingly shrouded in confusion.

The IAEA a month ago referred Iran to the U.N. Security Council after the Islamic nation failed to dispel doubts that its nuclear program was entirely peaceful and restarted uranium enrichment after a period of voluntary suspension.

Iran in response immediately stopped all voluntary cooperation with the agency under the Additional Protocol to the Non-Proliferation Treaty and stepped up research and development work on its technology to enrich uranium.

Enriched uranium can be used for both civil and military applications.

After the referral, the Security Council agreed to defer any action until IAEA Director-General Mohamed ElBaradei delivered his report at Tuesday's meeting.

However, ElBaradei said on Monday that he expected no resolution to be delivered to the council.

Senior officials close to the IAEA said that, in the case of no resolution, a summary of the debate would be submitted to the Security Council along with the director-general's report.

One official said that he expected the council to simply consider the report, ask Iran to comply with inspections and leave the case in the hands of the IAEA.

ElBaradei, however, displayed a positive attitude on Monday as he called for a return to the negotiating table, saying that he believed a deal could be cut "within the week."

The key point would seem to be the issue of research and development on uranium enrichment.

Iran wants to conduct its own enrichment program, which it says is for civil applications, but the West is nervous that it could be used for military applications.

An IAEA official indicated that Iran was prepared to suspend industrial-scale production of uranium for two years and that some compromise could be reached on small-scale research.

Iran is currently doing development work on 20 centrifuges, which is nowhere near enough to develop a nuclear weapon at anything other than a snail's pace.

Centrifuges are used to separate the uranium isotopes useful for the fission process, and uranium for military use needs to be enriched to a much higher level than that for civil use.

The official said that at least 164 centrifuges would be needed to begin serious work, and that around 1,500 would be needed to produce enough enriched uranium for one bomb per year.

According to the IAEA, Iran has around 1,200 centrifuges in total, but it isn't clear how many of these are useable.

Some kind of solution could allow limited enrichment activities, but the official said that nobody had any idea where "the red line could be drawn."

ElBaradei's report, leaked to the press in advance, said that some small progress had been made in gaining access to previously unavailable information, but failed to clarify the nature of Iran's nuclear program.

The lack of clarity has led to a barrage of speculation.

Iran and Russia have been in discussions over enriching uranium in Russia, and unconfirmed reports have emerged that Russia could also be prepared to allow Iranian scientists to work on Russian soil.

Iran, however, would be unlikely to accept this solution, as it has repeatedly asserted its right to conduct a peaceful enrichment program on its own soil.

Other unconfirmed reports emerged that Iran was planning to arm its long-range Shahab-3 missile with nuclear warheads.

However, the senior official refused to comment on the issue, coined Project 111, when questioned.

"At the moment, all we have is information from many sources that needs to be verified," he said. "We need facts to have a smoking gun."

The meeting to discuss ElBaradei's report was expected to run on into Wednesday.

4.

Special report

Iran

SEARCH FOR ELUSIVE DEAL BEGINS AS U.N. AGENCY MEETS ON IRAN
By Ian Traynor

** Mixed signals from west on desire for compromise -- Tehran's refusal to halt R&D a key sticking point **

Guardian (UK)
March 7, 2006

http://www.guardian.co.uk/iran/story/0,,1725133,00.html

A last-ditch attempt to find a formula to end the dangerous standoff over Tehran's nuclear programs got under way yesterday, with optimistic talk of an agreement to revive negotiations that broke down in January.

But Iran and the West continued to trade verbal blows and headed towards confrontation over the U.S. and European resolve to shift the dispute to the U.N. Security Council in New York this week, launching a process that could result in sanctions. Tehran is threatening to retaliate with full-scale uranium enrichment.

Behind the scenes at the International Atomic Energy Agency (IAEA) the search appeared to be on for a deal to at least give the parties some breathing space.

Opening a meeting of the 35-strong IAEA board, the agency's chief, Mohammed ElBaradei, said he was optimistic that a deal could be struck this week and emphasized that a key issue was defining nuclear "research and development," which Iran says it will not give up.

The R&D refers to low-level work on uranium enrichment. The Europeans and the Americans are demanding Iran freezes all enrichment work before its negotiations with the EU can be resumed.

A U.S. State Department official said Washington wanted the Security Council to tackle the Iranian challenge "sooner rather than later."

Iran responded by warning that Security Council action would kill off all chances of a negotiated settlement and provoke it to embark on large-scale enrichment. This is the best route to a nuclear bomb, although Iran insists its programs are peaceful. While U.S. and European officials insisted no talks were taking place with Iran, senior officials close to the IAEA said the opposite and that Germany, France and Russia were keen to explore Iranian proposals.

"There is a lot of dialogue going on to try to reach an agreement on modalities for Iran and the EU to go back to the negotiating table," Dr. ElBaradei said.

Western diplomats said the IAEA chief supported an arrangement under which Iran would freeze uranium enrichment for two years, resume talks with the EU on an overall settlement of the row, agree to intrusive IAEA inspections of its programmes, but be allowed to operate a small number of centrifuges for research.

Such a deal would be a victory for Iran, but would also enable the West to keep a closer watch on Iran and slow its progress. "It's a good deal," said a diplomat sympathetic to the IAEA expert view.

European and U.S. officials, however, insisted the Iranians had to reinstate a full freeze on enrichment and also made plain that two years was too short a period for "restoring confidence" in Iran's plans.

"R&D makes it sound innocent and peaceful. We don't consider their program to be innocent and peaceful," said the state department source.

For three years, the bottom line of Western strategy has been to deny Iran uranium enrichment because it is the key to acquiring the knowhow for a nuclear bomb. "R&D is an issue which is very much divisive," said Dr. ElBaradei. "Both parties are taking a hard position."