Iran nuclear offer falls short

VIENNA (AP) - Iran has formally set out its terms for giving up most of its cache of enriched uranium in a confidential document - and the conditions fall short of what has been demanded by the United States and other world powers.

Washington dismissed the document - seen by The Associated Press on Tuesday - as a "red herring" and warned it would consult with its allies on new penalties on Iran to punish it for its nuclear defiance.

The document says Tehran is ready to hand over the bulk of its stockpile, as called for under a deal brokered by the International Atomic Energy Agency and endorsed by the five permanent U.N. Security Council members and Germany.

But Iran adds that it must simultaneously receive fuel rods for its research reactor in return, and that such an exchange must take place on Iranian territory.

The Iranian offer was sure to be rejected by the six powers, which have waited for nearly six months for such an official answer.

The United States and others fear Iran's nuclear program is geared toward making nuclear weapons, while Tehran claims it is simply to provide more power for its growing population. The United Nations has slapped sanctions on Iran for its defiance on nuclear issues.

Ali Asghar Soltanieh, the chief Iranian delegate to the IAEA, told the AP the document - his letter to International Atomic Energy Agency chief Yukiya Amano - was "formally reflecting" his country's position, which has been expressed to the IAEA and to the media in various forms.

The U.S. and its allies have previously said there can be no significant deviation from the original deal, which would commit Iran to shipping out its nuclear material first and then waiting up to a year for it to be turned into fuel for its reactor, which makes medical isotopes.

U.S. State Department spokesman P.J. Crowley told reporters in Washington that Iran's counterproposal was unacceptable.

"It doesn't say anything new," Crowley said. "We've heard this before. We think that the arrangement that we put on the table in Geneva is the right one. The Iranian response in essence is, in our view, a red herring." He said Washington would discuss "appropriate next steps, including prospective sanctions," with its allies.

Nor was the British Foreign Office impressed by the new document.

"We continue to support the original deal," the Foreign Office said a statement. "Iran has continually failed to respond fully to that proposal."

"It is clearly for the interested parties to respond but it is hard to see how this latest 'offer' properly addresses these issues," said the statement.

The statement was issued after Amano met in London with British officials including Foreign Secretary David Miliband.

The letter to Amano - dated Feb. 18 - says Iran is "still seeking to purchase the required fuel in cash." However, it was unclear how Iran would do that, because there are no stockpiles of fuel specifically made for its reactor.

Iran is ready to exchange its low-enriched uranium for the fuel rods "simultaneously in one package or several packages in the territory of the Islamic Republic of Iran," the letter says.

World powers insist that Iran ship out most of its enriched uranium first then wait for the fuel rods because that would delay Iran's ability to make a nuclear weapon by leaving it with too little material to make a warhead.

But Iran's continued rejection of the deal appears to have worked in its favor.

When the agreement was drawn up nearly six months ago, it foresaw Iran exporting about 1.2 tons of low-enriched material for further enrichment in Russia to near 20 percent and then reprocessing in France into fuel rods. Back then, that would have been about 70 percent of the Iranian stockpile.

But Iran has continued to enrich since, and now has about 2 tons of low-enriched uranium.

That means that even if Iran now agreed to ship the requisite 1.2 tons, it would still be left with about 800 kilograms (1,765 pounds) - about two-thirds of what is needed to enrich further to produce weapons-grade uranium.

Iran continues to enrich in defiance of the U.N. Security Council, saying it has a right to do that to make nuclear fuel.

Along with Tehran's opposition to the deal endorsed by the six powers, its recent decision to start further enrichment to near 20 percent has led to a Western push for a fourth set of Security Council sanctions.

Concerns have grown because it is much easier to enrich to weapons-grade uranium from the 20 percent level than from Iran's current 3.5 percent stockpile.

Iran insists that its activities are peaceful. But an agency report prepared last week says the IAEA is worried Iran may currently be working on making a nuclear warhead - suggesting for the first time that Tehran had either resumed such work or never stopped when U.S. intelligence thought it did.

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Associated Press writers David Stringer in London and Matthew Lee in Washington contributed to this report.