President Obama’s policy of diplomatic engagement with Iran is close to collapse as Tehran backtracks on a crucial deal aimed at cutting its stockpiles of nuclear fuel.

Iran agreed a deal “in principle” at talks in Geneva to ship the majority of its low-enriched uranium overseas for reprocessing into nuclear fuel that could be used for a medical research reactor.

A deal outlining this was finalised in Vienna this week and a deadline of midnight tonight was set for the agreement to be sealed with Tehran.

The framework deal, along with an offer to allow international inspectors into its newly-revealed enrichment plant at Qom, was hailed as evidence that Iran was responding positively to the diplomatic track.

Today, however, with just hours until the deadline, Iran has turned the table on its foreign interlocutors with a rival proposal, demanding that it be allowed to buy higher enriched uranium directly from abroad.

Later, the Islamic Republic issued a statement saying that it would report to Mohammed El Baradei, the UN's atomic watchdog, next week.

"Iran is precisely examining different dimensions of the contents of the proposed agreement about the provisional supply of fuel for the Tehran research reactor,” Ali Asghar Soltanieh, Iran’s envoy to the UN atomic watchdog, was quoted as saying on state television’s website.

“After final evaluation, I will give the result to Mr. ElBaradei when I return to Vienna next week."

Tehran’s proposals fall far short of the deal drawn up in Vienna by the United Nations atomic watchdog and endorsed by the UN, the US, Russia and France. It would not only fail to reduce Iran’s stockpile of low enriched uranium — now large enough to fuel one nuclear warhead — but it would also require the waiver of pre-existing UN sanctions.

The counter-proposal was outlined on Iranian state television today as the clock ticked down to the midnight deadline. “The Islamic Republic of Iran is waiting for a constructive and confidence-building response to the clear proposal of buying fuel for the Tehran research reactor,” state television quoted an unnamed source close to Iran’s negotiating team as saying.

Western diplomats have warned that Tehran’s failure to agree to the deal could jeopardise talks in Geneva next week between Iran and the E3 plus 3 — the US, Russia, China, France, Germany and Britain — and open the door to a new regime of punishing sanctions.

Bernard Kouchner, the French Foreign Minister, said during a visit to Lebanon today that “via the indications we are receiving, matters are not very positive”. He added: “If these indications remain negative . . . this will reflect negatively on the continuation of the political contacts . . . in Geneva.”

Russia and China’s reluctance to consider new sanctions is forcing Washington to seek a coalition of willing allies to impose their own economic blockade on Iran if efforts to get UN sanctions fail.

Tehran’s latest move comes straight from a well-thumbed Iranian playbook and looks like yet another stalling tactic to test the West’s resolve and buy time to avert new sanctions. But Western patience is growing thinner by the day, with diplomats warning that the apparent breakthrough in Geneva on October 1 may be less positive than it first seemed.

Anxiety is now growing about what will happen on Sunday when inspectors from the International Atomic Energy Agency (IAEA) arrive in Iran to inspect the long-hidden nuclear plant at Qom.

“It’s like Groundhog Day,” a senior Western diplomat involved in the Iran negotiations said. “Except in Groundhog Day you wake up every day and everything’s the same. With this, you wake up every day and everything’s just a little bit worse.”

Under the IAEA deal Tehran would export 1,200kg (2,650lbs), or 80 per cent, of its low-enriched uranium stockpiles to Russia, where it would be further enriched. Russia, subcontracting for France to skirt Tehran’s objections to dealing directly with Paris, would send the material on to the French, who would convert it into special fuel rods. Those would be used to fuel the Tehran research reactor, which would produce isotopes for medical research.

The UN deal was proposed specifically to head off Iran’s request to buy the fuel ready-enriched, which Western governments feared was simply a ruse to justify them carrying out their own re-enrichment.

Iran says that its nuclear energy programme is only for producing electricity but it is years away from having any nuclear power plants that would use the low-enriched uranium that it has stockpiled and Western capitals fear that its true goal is to acquire a nuclear weapon.

Britain, France and Israel believe that Iran has all the know-how it needs to build a bomb and that weaponisation studies have continued despite Tehran’s insistence that it halted them years ago.

The IAEA has called Western intelligence on weaponisation “compelling” and chided Iran for refusing to answer questions on the subject. Iran remains in breach of five UN resolutions calling on it to halt enrichment until outstanding questions about a military dimension to the programme are resolved.

Nuclear brinkmanship

March 20, 2009 After years of US attempts to isolate Iran, President Obama calls for “engagement grounded in mutual respect”

April 9 President Ahmadinejad says Iran has mastered nuclear fuel cycle and tested enrichment machines

June 12 President Ahmadinejad is re-elected. Mass protests by moderates who say election rigged

August 21 Diplomats say Iran has co-operated with IAEA at two sites

Sep 1 Iran says it’s ready to resume talks with world powers

Sep 2 IAEA says Iran will not produce a nuclear weapon in the near future

Sep 11 US says it will accept Tehran’s offer of talks

Sep 17 Iran says it will never abandon nuclear programme

Sep 24 China dampens expectations of further sanctions

Sep 25 Western leaders make dramatic announcement that Iran is constructing secret plant

Sep 27 Iran begins two days of missile testing

Oct 1 Iran meets six world powers in Geneva

Oct 4 IAEA says it will inspect secret site on October 25

Oct 6 US threatens sweeping sanctions if talks fail

Oct 19 Vienna talks start well, despite Iran’s refusal to negotiate with France

Oct 21 IAEA presents draft deal to reduce Iran’s stockpile of enriched uranium

Oct 23 Iran fails to accept deal and offers own proposals

Source: Reuters

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