UN Watchdog Continues Iran Deliberations

On the first day of its meeting in Vienna on Tuesday, the watchdog International Atomic Energy Agency (IAEA) was unable to agree on a response to the Islamic republic's resumption on Monday of sensitive nuclear activities.

An IAEA spokeswoman said the body planned to resume full talks on Wednesday. "We are hoping to reconvene tomorrow (Wednesday) afternoon, but it all very much depends on the Iranians".

Those hopes, however, received a blow when it was revealed by the head of Iran's nuclear energy agency that the seals that the UN nuclear watchdog had placed on Iran's Isfahan uranium conversion plant would be removed on Wednesday. IAEA inspectors finished installing their surveillance cameras in the plant on Tuesday.

"The rest of seals will be removed today and the activities will resume," said Gholamreza Aghazadeh was quoted as saying on state television.

Breaking the seals is the next crucial stage at the plant after Iran resumed suspended uranium conversion activities on Monday, sparking warnings of an international crisis. Conversion turns uranium ore or yellowcake into a feed gas for enriching uranium, which can be the fuel for reactors or the explosive core of atom bombs.

Bush remains "deeply suspicious"

Meanwhile, speaking in Crawford, Texas, after the first day of the IAEA talks, US President George W. Bush warned Iran that the threat of UN sanctions over its nuclear activities remained, and made clear he was "deeply suspicious" of Tehran's stated intention to resume
talks with a trio of European Union states.

"We'll have to watch very carefully," Bush told reporters. "They have, in the past, said they would adhere to international norms and then were caught enriching uranium. And that's dangerous."

According to diplomatic sources, the IAEA board is unlikely to refer Iran to the UN Security Council because of its resumption of uranium conversion but will instead urge Tehran to suspend work. The meeting could last several days. Resolutions on the 35-nation board are normally adopted unanimously.

In France, Foreign Minister Philippe Douste-Blazy said: "It is still possible to negotiate" with Iran. "We are still holding out our hand," he told journalists.

IAEA unlikely to recommend sanctions

However, diplomats noted warnings that cracking down on Iran could isolate the country and said the IAEA board was backing away from referring it to the UN Security Council, which could impose sanctions.

Malaysian ambassador Rajmah Hussein, speaking for the non-aligned movement, called on the Europeans and Iran "to continue with their dialogue" and said verification issues "should be resolved solely within the framework of the IAEA."

But Russia, which is building Iran's first nuclear power reactor and is to supply it with nuclear fuel, came out against Iran, calling on it to halt fuel production work "without delay".

New president talks of "insult" at new deal

In Tehran on Tuesday Iran's new President Mahmood Ahmadinejad described as "an insult" an EU offer to Iran of trade and other incentives in return for guarantees it was not making nuclear weapons, but said he was still ready to carry on talks.

And in Vienna, Iranian negotiator Cyrus Nasseri said Iran was prepared to continue talks with the EU as long as there were no preconditions and the talks were in "good faith."

Nasseri said Iran was frustrated the EU was still not acknowledging what Iran considers its right under the Non Proliferation Treaty (NPT) to make nuclear fuel as part of a peaceful atomic program.