Solana Heads to Iran With Package of Incentives

The package, agreed on last week by the five permanent members of the UN Security Council plus Germany, offers Iran incentives and fresh multilateral talks -- involving the United States -- on the condition that Iran first suspend uranium enrichment.

"Mr Solana will arrive in Tehran tonight," a source close to the

visit said. Official sources indicated he was likely to hand the

proposal to Iranian President Mahmoud Ahmadinejad on Tuesday.

"Very, very soon I will be going to Tehran," Solana said at a press conference in the West Bank town of Ramallah earlier on Monday.

Iran agrees to study offer

Iran's uranium enrichment program is at the centre of fears the country could make nuclear weapons. The country has so far refused to suspend enrichment, arguing such fuel cycle work is for peaceful purposes only and is therefore a right enshrined by the Non-Proliferation Treaty.

But the Islamic republic's leadership has nevertheless agreed to study the offer of trade, security and technology benefits.

Iranian Foreign Minister Manouchehr Mottaki said Monday the a deal was possible but only if Iran's "demands" were met. "If their aim is not to politicise the issue and if they take our demands into consideration, we can reach a reasonable agreement," Mottaki told reporters.

Mottaki said Solana would hand the proposal -- drawn up by
Britain, France and Germany, and backed by the United States, Russia and China -- to top Iranian national security official Ali Larijani on Tuesday.

"We advise our European friends not to make the same errors as last year and not to take decisions without taking into account the positions of the Islamic republic," Mottaki added, referring to a previous EU offer of incentives in exchange for a freeze on sensitive nuclear work.

The latest offer from the six world powers is accompanied by a threat of robust UN Security Council action -- including possible sanctions -- if Iran fails to halt enrichment.

When asked to give details of the offer, Solana said: "I cannot answer this. I have said very clearly at the last meeting on Friday that this is something that we have to present to the Iranian people and government."

US sweetens deal

But diplomats told news agency AFP that the United States has moved to sweeten the offer to Iran by offering to lift some of its trade sanctions.

The United States is proposing "lifting sanctions partially, not only waiving sanctions but actually lifting them," in an agreement to be worked out in multilateral talks that would start once Iran suspended uranium enrichment, a senior Western diplomat said in Vienna.

Washington, which considers Iran a sponsor of terrorism and now fears it is covertly developing nuclear weapons, has since the mid-1990s banned most US trade and investment with the Islamic republic.

Lifting sanctions would allow sales to Iran of things like agricultural technology and commercial planes to replace the country's dilapidated fleet.

US officials have said they want to keep the details of the proposal secret in order to avoid the appearance of threatening Iran.

Iran maintains defiant stance

But a string of tough comments from Iranian officials have signaled that the offer could prove to be dead on arrival.

On Saturday, President Mahmoud Ahmadinejad revealed that in a telephone conversation earlier Saturday with UN Secretary General Kofi Annan, he had been asked "to examine the proposals and not act hastily."

"I said that we will not act hastily and that we will examine the proposals," Ahmadinejad said.

But the president has also ruled out halting enrichment, saying that "negotiating our absolute right would be like accepting to negotiate on our independence."

Iran's supreme leader Ayatollah Ali Khamenei said Sunday that his country would not buckle in the face of "threats and bribes".

"We have achieved a lot of scientific goals," Khamenei said in a speech marking the 17th anniversary of the death of Iran's Islamic revolutionary leader, Ayatollah Ruhollah Khomeini.

"This is an historic investment. It represents our political independence and national self confidence. We should not sell out this precious resource because of the enemies' threats and we should not be fooled by enemy bribes," he said.

Solana promises aid to Palestinians

Earlier on Monday Solana paid a visit to the West Bank, telling Palestinians that the EU will not let them down. Solana expressed hope that a special aid fund that would bypass Hamas would be in place by early next month.

"The Palestinian people can be assured that the EU will not let them down and we will continue to support them as much as we can," Solana told a joint news conference with Palestinian Authority president Mahmud Abbas.

"The amount of money which will be spent in the year 2006 will be more than that spent in 2005," he added in the West Bank town of Ramallah. The European Union -- the biggest aid donor to the Palestinians -- and the United States both suspended funding after militant Islamic group Hamas won January elections, while Israel has also blocked the transfer of revenues.

To avoid Palestinian financial meltdown, however, the EU, Russia, UN and US are working on setting up a World Bank fund to channel money to Palestinians without it passing through the Hamas-led government.