Most Western and developing nations in the UN nuclear watchdog tentatively agreed on Wednesday to shelve Iran's request for aid to a nuclear project over fears it could yield bomb-grade plutonium, diplomats said.
But the deal left open the possibility of revisiting Iran's case later, bowing to developing nations' concern not to set a precedent for rejecting aid to them for peaceful atomic energy projects, widening a gap between "nuclear haves and have-nots".
Days of controversy over Iran's bid for help with its Arak heavy-water reactor broke a long tradition in the International Atomic Energy Agency of routinely approving member state requests for technical assistance.
A draft chairman's summary of an IAEA board technical aid committee hearing on Monday and Tuesday said Iran's case would be forwarded to a full conference of the 35-nation board convening on Thursday without recommending how it should rule.
But diplomats said the great majority of board members could live with a compromise that would put off, but not reject outright, aid for Arak while ratifying seven other aid requests from Tehran judged to pose no bomb-proliferation risk.
These items have mainly to do with medical and regulatory aspects of civilian atomic energy which most board members are satisfied would not further Iran's ability to enrich uranium or reprocess spent fuel for bomb material.
"We expect that the board will approve all (832) technical assistance requests (from 115 IAEA member states) except for the Arak heavy water reactor item, but including the other items on Iran's list," a Western diplomat told Reuters.
"We expect the Arak item to be removed," he said. A senior diplomat from the Non-Aligned Movement that groups developing nations said its board members would insist the Arak bid "be deferred for the future". The board was likely to strive for a consensus on the matter to avoid a rare, divisive vote whose result could be close.
Another Western diplomat said "removing" Arak from the list before the board did not mean it could not be resubmitted with the next batch of technical co-operation projects in 2008.
"But if we are still in the same situation with Iran as we are today, I cannot imagine it would be approved then either." Western envoys said the Arak bid should be barred because of Iran's record of hiding sensitive nuclear fuel research from the IAEA, evading IAEA investigations and defying a UN Security Council order issued in July to stop enriching uranium.
Tehran says its nuclear agenda is limited to generating electricity or, in Arak's case, radio-isotopes for medical uses. Tehran intends to bring the Arak reactor on line in 2009.
But the United States and EU suspect Iran is seeking bombs with enriched uranium or plutonium to threaten Israel and Western interests in the Middle East, and are seeking sanctions against Tehran at the Security Council. The 40-megawatt Arak reactor would replace a much smaller, light-water model that predates Iran's 1979 Islamic revolution.
Western analysts say that Iran could produce radio-isotopes just as well with modern light-water reactors, without the plutonium diversion potential of the heavy-water variety. The second Western diplomat suggested many developing states came around to the idea to freeze action on Iran's Arak request to avoid endangering their own cases for nuclear assistance from industrialised states channelled via the IAEA.