Iran Proposes Big Changes To Draft Atom Deal

TEHRAN (Reuters) - Iran proposed changes to a U.N.-drafted nuclear fuel deal on Thursday, Iranian media said, making demands that appeared to challenge the basis of the agreement with the United States, France and Russia.

The U.N. International Atomic Energy Agency (IAEA), which had requested a reply by last Friday, said its chief, Mohamed ElBaradei, had now received an "initial response" from Tehran.

"(ElBaradei) is engaged in consultations with the government of Iran as well as all relevant parties, with the hope that agreement on his proposal can be reached soon," the IAEA said in a statement. It gave no further details.

The Iranian pro-government daily Javan said in an unsourced report that Iran wanted shipments of low-enriched uranium (LEU) -- for conversion abroad into fuel for a Tehran research reactor -- to take place in stages, not in a single consignment.

It also wanted simultaneous imports of higher-enriched fuel from other countries for the same plant.

The conditions were likely non-starters for Western powers, which suspect the Islamic Republic covertly seeks nuclear arms capability. Tehran says its program is only for electricity.

"If the Iranian position is as described, it gets the IAEA nowhere," a western diplomat in Vienna said. "They are undercutting Mohamed ElBaradei, who is seeking to help them demonstrate the peaceful intent of their nuclear program."

ELBARADEI PLAN

Under ElBaradei's plan, Tehran would transfer about 75 percent of its known 1.5 tons of LEU in one shipment to Russia by the end of this year for further enrichment. The material would then go to France to be converted into fuel plates.

These would be returned to Tehran to power the U.S.-built reactor, which produces radio-isotopes for cancer treatment.

The U.S. role would be to upgrade safety and instrumentation at the plant, Iranian officials said.

France reacted cautiously to the reports of Tehran's latest position, saying it wanted to see Iran "respond clearly and positively to the proposal submitted by the IAEA, which is fully supported by France, the United States and Russia."

Western powers were likely to rebuff Tehran's proposed amendments because their priority is to reduce the stockpile of Iranian LEU to ward off the danger that Iran might turn it into the highly enriched uranium needed for an atom bomb.

Sending most of the LEU abroad would buy about a year for talks on forging a long-term solution to the nuclear dispute, in which Western powers want Iran to halt enrichment in return for economic incentives.

Iran's request for nuclear fuel imports is problematic because U.N. sanctions ban trade in such materials with Tehran.

Western diplomats said Iran risks rekindling demands for harsher sanctions unless it acts on the fuel plan and other nuclear transparency measures before the end of the year.

"NOT ONE IOTA"

Iranian President Mahmoud Ahmadinejad reiterated that his country would not retreat "one iota" on its right to a nuclear program and suggested it was gaining ground in the dispute.

"They (the West) used to tell us to halt everything (nuclear activities), but today they have announced their readiness to cooperate with us in fuel exchange and technology," he said in a speech in the northeastern city of Mashhad on Thursday.

"We welcome cooperation on nuclear fuel, power plants and technology and we are ready to cooperate," he added, without saying whether Iran would accept the IAEA proposal or not.

But Iran's English-language satellite station PRESS TV quoted an unnamed source as saying that Iran did not trust other countries involved, such as the United States and France.

"Iran needs to receive guarantees that the nuclear fuel for Tehran's research reactor will in fact be supplied," it quoted the source as saying. "Iran as the buyer of the nuclear fuel should determine how much fuel it requires to purchase."

The draft fuel deal emerged from talks that followed an October 1 meeting in Geneva, where Iran also told six big powers it would open a newly disclosed enrichment site to U.N. inspectors.

Four senior IAEA inspectors returned to Vienna on Thursday after a first visit to the site, which Iran expects to start operating at the end of 2010. The team chief said it "had a good trip" but would not elaborate. Details are likely to come in the IAEA's next quarterly report on Iran, in mid-November.

The inspectors wanted full access and documentation to verify that the plant, being built beneath a mountain, was designed to enrich uranium only to the low purity needed for electricity, not the high level suitable for bombs.