Iran president risks crisis over oil nominee

TEHRAN - Iran's novice President Mahmoud Ahmadinejad has named an obscure figure as oil minister, risking a domestic political storm after already stirring one abroad with his call for Israel's destruction.

Parliamentarians quickly signaled they could veto Sadeq Mahsouli's appointment to run the oil portfolio of Opec's No. 2 producer, just as they threw out Ahmadinejad's attempt to place a close political ally in charge of the ministry in August.

Ahmadinejad's three-month-old government also faced sharp criticism from reformists for its decision to recall dozens of experienced ambassadors -- the biggest diplomatic shake-up since the 1979 Islamic revolution - at a time of heightened international concern over Tehran's nuclear ambitions.

A diplomat in Europe said Iran would start processing a new batch of uranium next week, despite pressure from the United States and European Union to halt all sensitive nuclear work.

"Beginning next week, the Iranians will start a new phase of uranium conversion at Isfahan," said the diplomat familiar with results of inspections by the UN nuclear watchdog.

Iran froze all activity at its Isfahan plant last year under a deal with France, Britain and Germany, but resumed work there in August, prompting the EU trio to suspend talks with Tehran.

Ahmadinejad, a former Tehran mayor who was elected on promises to stand up to Western pressures and funnel oil wealth to the poor, faces tough times ahead, political analysts said.

HOW MUCH ROPE?

"Ahmadinejad is clearly out of his depth," said Ali Ansari, an Iranian expert at Exeter University in England.

"It will have to be resolved internally. There is a view in Iran that if you give him enough rope, he'll hang himself. But how much rope will it take?"

Political heavyweights, including former presidents Mohammad Khatami and Akbar Hashemi Rafsanjani, have rebuked Ahmadinejad for stoking Western pressure through tough rhetoric such as his statement last week that Israel must be "wiped off the map".

Such open criticism is rare in Iran where key policy is usually forged by consensus and where Supreme Leader Ayatollah Ali Khamenei has the final word on all state affairs.

Ahmadinejad won support at a rally on Wednesday in Tehran where a few thousand demonstrators burned Israeli and US flags and chanted "Death to America" to mark the 26th anniversary of the seizure of the US embassy by radical students.

"What Mr Ahmadinejad said about Israel is based on our Islamic beliefs and the international reaction is for political reasons to put pressure on Iran over the nuclear issue," lawmaker Ali Riaz told Reuters at the rally.

But amid the bussed-in students and posters telling US President George W. Bush to "Go to Hell", some Iranians felt the anti-Western rhetoric was backfiring.

"We should moderate our stance. We don't want to be like North Korea, isolated and under sanctions," said a 34-year-old employee of state broadcaster IRIB, who declined to be named.

Washington severed ties with Tehran in 1980 and has imposed unilateral sanctions on the Islamic state, barring virtually all trade and investment, including in the oil sector.

DIPLOMATIC PURGE

Iran's Foreign Minister Manouchehr Mottaki acknowledged on Wednesday that Iran would replace more than 40 of its ambassadors by March but said the shake-up was due to retirements and the expiry of postings, not political factors.

But critics said most of those affected were moderates who disagreed with the president's foreign policy line and that many had not been long in their posts and had not been due to retire.

"As a radical hardline president, Ahmadinejad wants to show that Iran's nuclear and foreign policies have changed," said political analyst Saeed Leylaz.

Lawmakers in the conservative-dominated parliament appeared stunned that Ahmadinejad had for a second time passed over experienced oil hands to nominate an industry outsider to run the country's most prestigious cabinet job.

"Presumably the amount of information that we have about him is about as much as he knows about oil," Mohsen Yahyavi, a board member of the state oil company and member of parliament's energy commission, told Reuters.

Analysts said it was not clear whether Ahmadinejad enjoyed the support of Supreme Leader Khamenei who recently handed far-reaching supervisory powers to the more moderate and pragmatic Rafsanjani, who favors better ties with the West.

- REUTERS