Iran upholds "nuclear rights" as IAEA meets

(Reuters) - The chief of the U.N. nuclear watchdog said on Monday Iran was still resisting investigation into its atomic program, but he welcomed a big-power offer of incentives to Tehran to resolve the crisis.

Iran earlier ruled out any compromise on its right to enrich uranium, without rejecting outright the package offered by six major nations on condition it halts its work on nuclear fuel, reports Trend.

Tehran restated its position just before the International Atomic Energy Agency's governing board began meeting in Vienna.

"It (is) clear that the agency has not made much progress in resolving outstanding verification issues," IAEA Director General Mohamed ElBaradei said in a keynote speech to the board.

"I remain convinced that the way forward lies through dialogue and mutual accommodation," he said.

Diplomats said the IAEA would debate Iran but pass no resolutions, to avoid any diplomatic upset while Tehran considers its response to the big-power initiative.

"Iran's view on the nuclear fuel cycle has been announced ... we have obtained this technology, it is our obvious right and we do not negotiate over our obvious nuclear rights," Iranian government spokesman Gholamhossein Elham said in Tehran.

President Bush has said Iran has weeks, not months, to decide whether to accept the deal.

"The G8 foreign ministers' meeting at the end of the month will obviously be a time to see where we stand with Iran," a State Department official said on Monday.

Ministers from the Group of Eight industrialized nations meet on June 29-30 ahead of a G8 summit on July 15-17.

The official, who asked not to be named, said the IAEA board meeting was not a diplomatic deadline for the negotiations.

The nuclear dispute intensified in February when the IAEA referred Tehran to the U.N. Security Council over its history of hiding atomic research and obstructing IAEA investigations.

Last week the United States, France, Germany, Britain, Russia and China offered Iran incentives to stop making nuclear fuel. Tehran has repeatedly vowed to pursue such work.

THREAT OF SANCTIONS

Iran could face U.N. sanctions if it refuses to halt its enrichment program, which it says is intended only to produce fuel for nuclear power plants, not for atomic bombs.

The U.S. ambassador to the IAEA, speaking just before the 35-nation board convened, said the ball was in Iran's court and the next decision had to emerge from Tehran, not Vienna.

"The United States and other members of the IAEA board hope this will be a decision to refrain from further enrichment-related and reprocessing activities including research and development, and to take advantage of the enormous diplomatic opportunities that lie in front of the Islamic Republic," Gregory Schulte told a news briefing.

Iran's envoy to the IAEA, Ali Asghar Soltanieh, earlier urged the body to avoid "politically motivated statements that could spoil the environment" for a diplomatic solution.

Chief Iranian nuclear negotiator Ali Larijani said on Sunday the precondition on enrichment had to be clarified.

The Iranian Foreign Ministry has said Tehran will send its own counter-proposals to the international incentive package.

Western diplomats say the deal includes a light-water reactor and an atomic fuel storage facility, as well as a rare U.S. offer to join the European Union's direct talks with Iran.

Western leaders have in the past ruled out allowing Iran any domestic nuclear fuel program. But the new package would allow for one after an open-ended halt to enrichment work, probably lasting years, and under full IAEA surveillance.

"No one is expecting fireworks. The priority is not to distract from the package on the table for Iran -- the best chance, maybe the last one, for a non-confrontational solution," said an IAEA diplomat, speaking on condition of anonymity.

Iran says its nuclear program aims to produce low-enriched uranium for electricity generation. The West suspects Iran, with the world's second largest reserves of oil and gas, is bent on enriching uranium to the high level used to make atom bombs.

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