The UN nuclear watchdog held a crisis meeting on Tuesday to try to stop Iran pursuing a nuclear programme after Tehran resumed work at a uranium plant, stoking Western fears it was bent on developing atomic weapons.
As the governors of the International Atomic Energy Agency (IAEA) met in Vienna, Iran's new President Mahmoud Ahmadinejad said he had new ideas to resolve the nuclear stand-off with the West and was ready to continue nuclear talks with the EU.
"I have new initiatives and proposals which I will present after my government takes office," he said in a telephone conversation with UN Secretary General Kofi Annan, the semi-official ISNA students news agency reported.
He said Iran - which says it is only seeking nuclear power - had done nothing unlawful by resuming uranium conversion at a nuclear facility near the central city of Isfahan on Monday.
Iran's chief delegate at the IAEA meeting, Sirus Naseri, was more specific, telling reporters after the IAEA session adjourned that Iran wanted to continue talks with France, Britain and Germany but only on terms satisfactory to Tehran.
"We no longer accept being left out in the cold to wait for the Europeans to come up with a plausible basis for a solution," he said, adding an Iranian proposal to settle the stand-off by increasing IAEA inspections was "still on the table".
"We can negotiate with the Europeans on the basis of that proposal," he said, adding Iran would continue to resume some of the nuclear activities it had suspended under a November 2004 agreement with the EU.
Ahmadinejad told Annan an EU offer of incentives if Tehran scrapped its uranium enrichment programme was "an insult to the Iranian nation". Tehran rejected the offer on Monday.
"They have talked to us ... as if the Iranian nation was suffering from backwardness and the time was 100 years ago and our country was their colony," he said.
IRAN TO RESUME MORE FROZEN ACTIVITIES Another senior Iranian delegate to the Vienna meeting said UN seals were to be removed at Isfahan that could allow it to take the work a step further.
Mohammad Saeedi, deputy head of Iran's Atomic Energy Organisation, said IAEA inspectors surveying developments at the plant would unseal a mothballed section by Wednesday.
"The agency has promised us it will remove the seals by noon (0730 GMT) on Wednesday because the installation of cameras has been completed," he told Reuters.
On Monday Iran resumed work at a less sensitive part of the plant that had not been sealed, ending an agreed moratorium.
It had mothballed some nuclear activities under the November deal with the European Union's three biggest powers.
Restarting the work, Tehran defied EU warnings it could now be referred to the UN Security Council for possible sanctions for having hidden its nuclear work for years - though the IAEA looked unlikely to take such a step at the Vienna meeting.
Iran's secrecy breached the nuclear Non-Proliferation Treaty (NPT) which it has signed and which aims to thwart the spread of nuclear arms.
"I would hope that this is simply a hiccup in the process and not a permanent rupture (in the EU-Iran talks)," IAEA director general Mohamed ElBaradei told reporters.
He also called on Iran to continue talks with the Europeans and said it must suspend its nuclear fuel programme to build confidence that its nuclear ambitions were entirely peaceful.
ElBaradei said the board would probably need "one or two days" to decide how to act.
RUSSIA URGES IRAN TO RESUME SUSPENSION Iran's nuclear ally Russia, which is building a nuclear power plant at Bushehr in Iran, called on Tehran to immediately resume the suspension.
"It would be a wise decision to immediately stop the resumed work on uranium conversion and continue close co-operation with the IAEA to remove all remaining questions relating to the Iranian nuclear programme," the Foreign Ministry said.
The West could call for sanctions on the grounds that Iran illegally hid its uranium enrichment programme, including a massive underground enrichment plant at Natanz, the existence of which was revealed by exiled dissidents in 2002. "If Iran doesn't resume the full suspension of all nuclear fuel activities, it will face the UN Security Council," an EU diplomat told Reuters. "This meeting probably won't call for a referral to the council. Iran will be warned, and if it doesn't comply, then we will meet again and decide on the Security Council."
The new US ambassador to the IAEA, Gregory Schulte, told reporters Washington was consulting the EU and others on the IAEA board about "next steps" and said Iran "must not be allowed to develop nuclear weapons."
An IAEA spokeswoman said the board hoped to resume its meeting on Wednesday but that depended on EU negotiations on their draft resolution.
Oil hovered near a record $64 a barrel as traders worried the nuclear stand-off with Iran and possible militant strikes in Saudi Arabia could disrupt crucial Middle East exports. The EU3 hope to persuade all the developing countries on the IAEA's 35-member board meeting to back an IAEA resolution urging Iran to resume the suspension of uranium conversion activities.
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