Bush says sees risk of Iranian nuclear blackmail

MANHATTAN, Kansas - US President George W Bush said today he was concerned a future nuclear-armed Iran could blackmail the world.

But in a setback for US-European Union efforts to crack down on Iran over its disputed nuclear programme, the UN nuclear watchdog chief ruled out advancing a wide-ranging report on the issue in time for a Feb. 2 crisis meeting of his agency.

In remarks at Kansas State University, Bush cited Iranian President Mahmoud Ahmadinejad's expressed wish for Israel to be wiped off the map as a sign that Iran sought a nuclear arsenal.

"The world cannot be put in a position where we can be blackmailed by a nuclear weapon," he said.

He also had a message for the Iranian people, saying "we have no beef with you," and expressing hope that Iraq's fledgling democracy could serve as an example for nearby Iran.

Bush said "the next logical step" in dealing with Iran was for the International Atomic Energy Agency's 35-nation governing board to refer the Islamic republic to the UN Security Council for possible sanctions.

Earlier, Iranian officials said they did not fear Western threats over their atomic energy drive and vowed to pursue uranium enrichment even if sent to the Security Council.

But Tehran, which denies Western suspicions that it seeks to build atomic bombs, also urged more dialogue with the European Union to resolve a standoff that is jacking up world oil prices.

Western powers have urged IAEA chief Mohamed ElBaradei to make a broad accounting of Tehran's nuclear project to the special IAEA meeting they called for February, rather than wait for a regularly scheduled March 6 session.

US and EU officials believe a full report would help them persuade sceptical Russia, China and developing states on the IAEA board to vote at the February gathering for referral.

But ElBaradei, replying to US, EU and Australian letters, said he had given Iran until the March meeting to answer questions in IAEA inquiries into its nuclear project, which it concealed from UN inspectors for almost two decades.

"Due process, therefore, must take its course before (we are) able to submit a detailed report," he said in a letter to the US, British, French and Australian envoys to the IAEA, distributed to all board members and seen by Reuters.

But he said his deputy for safeguards issues would brief the February meeting about Iran's announced resumption on January 9 of nuclear fuel research and limited uranium-enrichment work, which broke a deal with EU negotiators and dismayed the West.

ElBaradei, giving other reasons for not accelerating a full report, said a fresh IAEA verification mission was due in Iran shortly and that he had only last week sent extra questions to Iran based on what diplomats called newly released intelligence.

Diplomats close to the IAEA say ElBaradei disagrees with the Western thrust for referral now, believing further direct talks with Iran and IAEA investigations could still rein in Tehran before a volatile showdown in the Security Council.

Iran has threatened to end IAEA snap inspections and, as the world's No. 4 oil exporter, hinted it would cut back crude exports if sent to the Council -- scenarios that have made many countries leery of pursuing sanctions against Tehran.

To bridge divisions over what to do about Iran, Russia has suggested the IAEA board next month authorise a Security Council debate but leave any referral action, which would open the way to sanctions, at least until the March meeting, diplomats say.

A British-French letter to ElBaradei requested a "short progress report" on the period since the last IAEA board in November, covering verification of Iranian declarations and monitoring of Iran's voluntary halt to uranium purification.

It also asked ElBaradei to explain to board members the significance of a document Iran gave to IAEA inspectors last year containing what some Western diplomats said were the instructions for making the core of a nuclear bomb.

Iran denies accusations that it is seeking nuclear weapons under the guise of a civilian atomic energy programme, saying it aims only to generate electricity for a growing economy.

"We are not going to yield to pressure to abandon our rights, and we have the necessary tools to protect ourselves," Ahmadinejad said after meeting the Qatari foreign minister.

"We still believe talks are the best way to solve the issue," he was quoted as saying by ISNA news agency.

EU powers Germany, Britain and France have rejected Iran's requests for more negotiations until it reinstates a moratorium on uranium enrichment and other sensitive nuclear work.

Washington says Iran's enthusiasm for dialogue is part of what one official called a "diplomatic fog machine" to buy time.

Bubbling tensions over Iran and other global supply worries have driven up oil prices more than US$10 ($14.62) since late December.

- REUTERS