WASHINGTON - Iran and the US are locked even more firmly on a collision course after the United Nations formally declared that Tehran had failed to meet an international deadline to halt uranium enrichment, opening the way for possible sanctions by the Security Council.
After Iran's latest studied acts of defiance, including the opening of a heavy water plant at the weekend, yesterday's verdict from the Vienna-based International Atomic Energy Agency (IAEA), was a foregone conclusion.
"Iran has not suspended its enrichment related activities," a report said, nor had Tehran addressed "long outstanding verification issues."
Indeed, according to the IAEA, Iran had started a new round of enrichment on August 24, a week before the deadline.
As the dispute moved inexorably towards the UN and punitive measures against the Islamic regime, both sides stepped up their rhetoric.
In what was billed by the White House as a major national security speech, President Bush placed the nuclear showdown squarely in the context of the 'war on terror.' Tehran had to pay the price for its refusal to bow to the demands of the UN, he told a convention of veterans in Salt Lake City.
Again Mr Bush pledged to seek a diplomatic solution to the crisis, but "it is time for Iran to make a choice...there must be consequences for Iran's defiance and we must not allow Iran to develop a nuclear weapon."
The response from the Iranian government however was equally uncompromising.
Although the report was "not fully satisfactory," Mohammed Saeedi, the deputy chief of the country's atomic energy organisation, said, it was enough to show that American "propaganda and politically motivated claims" that its nuclear programme was designed to product a bomb, were "baseless and based on hallucinations."
But John Bolton, the US ambassador to the UN, yesterday re-iterated Washington's position that Iran's refusal to c-operate proved that its nuclear programme was anything but for purely peaceful purposes.
The confrontation thus seems bound to intensify in the weeks ahead.
Mr Bush will highlight the Iran crisis when he addresses the UN General Assembly on September 19, by which time some indication is likely of what action will be forthcoming from the Security Council.
But the prospect of severe sanctions is dim.
The European Union, which has failed to persuade Tehran to accept a package of incentives to halt enrichment, has broadly lined up behind the US in its condemnation of Iran.
But Russia, which has veto powers on the Security Council and whose attitude will be crucial, was notably vague yesterday, noting merely that the matter should now to before the Council, without delivering a specific verdict on Tehran's response.
Diplomats believe that both Russia and China - which also has major economic interests in Iran - are reluctant to endorse sanctions that go beyond minor irritants such as travel restrictions on senior Iranian officials.
In that case, Mr Bolton warned, the US was prepared to take diplomatic action with the EU and other allies, outside the framework of the Security Council.
"Unanimity is not required," he said, referring to the possibility of a veto threat by either Russia or China.
But contacts, formal and informal, will continue.
Mohammed Khatami, Iran's former reformist President, will be in the US next week - though Mr Bolton said he had no plans to meet him.
Meanwhile Javier Solana, the EU's foreign and security affairs chief, will hold talks with Ali Larijani, Iran's top nuclear negotiator, in the next few days, according to EU diplomats.
However, if Iran's latest offer merely to hold "serious negotiations" on the nuclear dispute is any indication, these are unlikely to be more than 'talks about talks.'
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