Iranian nuclear official denies Arak nuclear reactor offline


An Iranian nuclear official denied a report that Iran has dismantled the core of its heavy water nuclear reactor as part of its deal reached with the world powers.

Iran’s deputy nuclear chief, Ali Asghar Zarean, told Iran’s state television on Tuesday that it will not change the core of the Arak heavy water nuclear reactor until it reaches a final agreement with China to modify the reactor, Reuters reported.

However, the reactor is expected to be decommissioned in the coming days, the official state news agency IRNA reported, citing the Atomic Energy Agency of Iran.

The statements were in response to a report by the state-sponsored Fars News Agency that Iran finished taking out the core of its heavy water nuclear reactor in Arak and filling it with cement on Monday, thus fulfilling its responsibility under the nuclear agreement reached over the summer with six countries, including the United States.

Under the agreement, Iran is required to redesign the Arak reactor so it cannot produce plutonium for nuclear weapons. Iran claims it needs the heavy water reactor for production of medical isotopes.

The deal, vehemently opposed by Israeli Prime Minister Benjamin Netanyahu, Republicans in the U.S. Congress and many American Jewish organizations, lifts economic sanctions in exchange for Iran curbing its nuclear program.

Iran deal: See dealer for details


The more I get into the Iran nuclear deal, the more it feels like the television show “Mad Men” — you know, those slick advertising geniuses who seduce you with promises but downplay the fine print.

It’s like one of those radio commercials for hot new car deals, where the announcer chokes on his breath while reading the qualifiers: “MSRP excludes taxes, title, other options and dealer charges; higher MSRP will affect lease price; dealer sets actual prices; lessee responsible for insurance; closed-end lease offered to approved customers only through participating dealers; additional charges may apply at lease end; supplies limited; offer ends March 1. See dealer for details.” 

Oh my, what a deal.

Well, it certainly reminds me of the Iran deal, which is littered with fine print, some of it quite treacherous. 

“Anytime, anywhere” was a wonderful promise … until we discovered the qualifier that Iran can delay inspections of its nuclear sites by more than 24 days. In fact, the process is so cumbersome and bureaucratic it can easily stretch out, according to The Wall Street Journal, to three months or more.

Three months or more! That’s like telling a drug dealer you’ll be busting his house next Tuesday at noon. As Jackie Mason noted, restaurants in New York City have a much tougher inspections regime than what we negotiated with Iran, because they can be inspected at any time without any notice.

This is not about partisanship or politics. It’s about something we all have in common: We hate getting ripped off, especially by slick Mad Men.

Why is this issue so critical?

Because a super-tough inspections regime was supposed to be our consolation prize for allowing Iran to keep its nuclear infrastructure. If you’ll recall, the original goal of diplomacy was pretty straightforward: The United States and its partners would make a major concession — the end of nuclear sanctions — in return for Iran making a major concession — the end of its nuclear program.

When we decided to concede to Iran the right to keep most of its nuclear infrastructure, inspections became the decisive deal point. Anything short of ironclad would seriously weaken the deal. Can anyone argue with a straight face that the inspections regime we negotiated is ironclad?

As bad as that is, though, it gets worse.

“Anytime, anywhere” came with another sexy promise: “snapback sanctions.” In combination, these two promises created an irresistible sales pitch: “We’ll surely catch Iran if it cheats, and when we do, the sanctions will snap right back!”

Irresistible, yes, but wait until you see the fine print.

Simply put, in the unlikely event that we ever do catch Iran cheating and try to “snap back” sanctions, there won’t be many sanctions left to snap back to.

Here is how Washington Institute’s Executive Director Robert Satloff explains it: “Let’s say that the U.N. Security Council does order the reimposition of sanctions. According to my read of the agreement, all contracts signed by Iran up until that point are grandfathered in and immune from sanctions. That means one can expect a stampede of state-to-state and private sector contracts — some real, many hypothetical — all designed to shield Iran from the impact of possible reimposition of sanctions.”

In other words, Iran can quickly rack up a slew of deals with Russia, China and Europe worth more than $100 billion and, even if Iran is caught building a nuclear bomb behind our back, we will have zero power to undo those deals.

I don’t care if you’re Republican or Democrat, this fine print stinks.

The grandfather loophole is especially lethal. Once the Persian mullahs make their irrevocable deals, why should they fear us? It will be difficult enough to catch them cheating — what will restrain them if they’re not even afraid to get caught?

As the emotions are heating up in our community over this deal, I’d like to suggest a less emotional reaction: Study the fine print.

I have, and that’s why I oppose the deal. It’s full of nasty surprises. There are many other examples, such as the sneaky switch from United Nations Security Council Resolution 1929, which says Iran shall not undertake any activity related to ballistic missiles; to the current deal, which says only that Iran is called upon not to undertake such activity. From the mandatory “shall not” to the permissive “called upon”— sneaky, indeed.

The Iran nuclear deal may be complex and hard to understand, but, in my book, the real danger is in the fine print. Study it closely. This is not about partisanship or politics. It’s about something we all have in common: We hate getting ripped off, especially by slick Mad Men.


David Suissa is president of TRIBE Media Corp./Jewish Journal and can be reached at davids@jewishjournal.com.

Iran, six powers agree to four-month extension of nuclear talks


Iran and six world powers on Friday agreed to a four-month extension of negotiations on a long-term nuclear deal that would gradually end sanctions on Tehran in exchange for curbs on its nuclear program, diplomats close to the talks said.

Iran, the United States, Britain, France, Germany, Russia and China had set a July 20 deadline to complete a long-term agreement that would resolve the decade-old dispute over Tehran's nuclear ambitions. But diplomats said they were unable to overcome significant differences on major sticking points.

“We have reached an agreement to extend the talks,” a senior Iranian diplomat told Reuters on condition of anonymity. Several Western diplomats echoed his remarks.

The extension agreed to on Friday begins on July 21 and negotiations on a long-term deal are likely to resume in September, diplomats said. They added that the talks were set to conclude by late November.

It has been clear for days that Iran and the six powers would miss the Sunday deadline to reach an accord due to disagreements on a number of key issues in the discussions.

Among the issues dividing them are the permissible scope of Iran's nuclear fuel production capacity and how to address the country's suspected past atomic bomb research. The negotiations began in February in Vienna.

The talks are taking place because of a preliminary agreement reached in Geneva in November 2013 that gave Iran limited sanctions relief in exchange for halting some nuclear activities and created time and space for the negotiation of a comprehensive deal to end the decade-long dispute.

But it remains uncertain whether four more months of high-stakes talks will yield a final agreement, since the underlying differences remain significant after six rounds of meetings this year.

Western nations fear Iran's nuclear programme may be aimed at developing a nuclear weapons capability. Tehran denies this.

The powers want Iran to significantly scale back its nuclear enrichment programme to make sure it cannot yield nuclear bombs. Iran wants sanctions that have severely damaged its oil-dependent economy to be lifted as soon as possible.

After years of rising tension between Iran and the West and fears of a new Middle East war, last year's election of a pragmatist, Hassan Rouhani, as Iran's president led to a thaw in ties that resulted in November's diplomatic breakthrough.

But Iran's new government still insists that the country has a right to develop a nuclear energy programme that includes the production of atomic fuel. The West fears that this fuel, if further processed, could also be used to make bombs.

Iranian Foreign Minister Mohammad Javad Zarif told reporters earlier this week that Tehran would be willing to delay development of an industrial-scale uranium enrichment programme for up to seven years and to keep the 19,000 centrifuges it has installed so far for this purpose.

U.S. Secretary of State John Kerry joined the talks last weekend and held several face-to-face meetings with Zarif, but he said before leaving Vienna on Tuesday it was “crystal clear” that Iran keeping all of its existing centrifuges was out of the question.

The United States and its European allies also want Iran to accept restrictions on its nuclear programme for at least 10 years, which Tehran says is excessive.

Additional reporting by Parisa Hafezi in Vienna and by Alissa de Carbonnel in Moscow; Editing by Louise Ireland and Tom Brown

Iran, six powers meet on steps to carry out nuclear deal


Iran and six world powers began expert-level talks on Monday to work out nitty-gritty details in implementing a landmark accord for Tehran to curb its disputed nuclear program in return for a limited easing of sanctions.

The preliminary accord is seen as a first step towards resolving a decade-old standoff over suspicions Iran might be covertly pursuing a nuclear weapons “breakout” capability, a perception that has raised the risk of a wider Middle East war.

Officials from Iran and the United States, France, Germany, Britain, China and Russia met at the Vienna headquarters of the U.N. nuclear agency, which will play a central role in verifying that Tehran carries out its part of the interim deal.

The outcome of the meeting is expected to determine when Iran stops its most sensitive nuclear activity and when it gets the respite in sanctions that it has been promised in return.

The International Atomic Energy Agency (IAEA) said it would have “some involvement” in the discussions, which are expected to continue on Tuesday. Media were barred from the floor where the meeting, held under tight secrecy, took place.

The talks are aimed at “devising mechanisms” for the Geneva accord's implementation, Iranian Deputy Foreign Minister Abbas Araqchi was quoted by state Press TV as saying. Iranian nuclear as well as central bank officials would take part, he said.

Western diplomats said detailed matters not addressed at the Nov. 20-24 talks in Geneva must be ironed out before the deal can be put into practice.

These include how and when the IAEA, which regularly visits Iranian nuclear sites to try to ensure there are no diversions of atomic material, will carry out its expanded role.

A start to sanctions relief would hinge on verification that Iran was fulfilling its side of the accord, they said.

The deal was designed to halt Iran's nuclear advances for a period of six months to buy time for negotiations on a final settlement of the standoff. Diplomats say implementation may start in January after the technical details have been settled.

Scope for easing the dispute peacefully opened after the June election of a comparative moderate, Hassan Rouhani, as Iranian president. He won in a landslide by pledging to ease Tehran's international isolation and win relief from sanctions that have severely damaged the oil producer's economy.

ARAK REACTOR

Diplomats caution that many difficult hurdles remain to overcome – including differences over the scope and capacity of Iran's nuclear project – for a long-term solution to be found.

In a sign of this, Israeli Prime Minister Benjamin Netanyahu pressed the powers on Sunday to take a hard line with Iran in negotiations on a final agreement, urging them to demand that Tehran abandon all uranium enrichment.

A day after President Barack Obama deemed it unrealistic to believe Iran could be compelled to dismantle its entire nuclear infrastructure, Netanyahu said Tehran should have to take apart all centrifuges used to refine uranium.

Israel sees Iran, which has repeatedly said it seeks only civilian energy from uranium enrichment, as a mortal threat. Iran says it is Israel, widely believed to be the Middle East's only nuclear-armed power, that threatens peace.

Under last month's pact, Iran will halt the activity most applicable to producing nuclear weapons – enrichment of uranium to a higher fissile concentration of 20 percent – and stop installing components at its Arak heavy-water research reactor which, once operating, could yield bomb-grade plutonium.

In the Vienna talks, government experts will also discuss details of which components Iran is not allowed to add to the Arak reactor under the deal, as well as issues pertaining to the sequencing of gestures by both sides, the diplomats said.

Officials from the office of European Union foreign policy chief Catherine Ashton, who coordinates talks with Iran on behalf of the six powers, were also at the meeting.

Additional reporting by Isabel Coles in Dubai; Editing by Mark Heinrich

Iran, world powers meet in Kazakhstan on Islamic Republic’s nuclear program


Iran and six world powers are meeting for talks on Iran's nuclear program.

The talks began Tuesday in Kazakhstan. It is the first negotiations to be held in nearly eight months. The world powers are made up of Germany and the five permanent members of the United Nations Security Council: United States, France, Britain, Russia and China.

In advance of the meetings, the United States proposed an easing, but not lifting, of sanctions on Iran in exchange for greater transparency.

Since the last talks eight months ago, Iran reportedly has expanded its nuclear program and is believed to be closer than ever to building a nuclear bomb.

Also during those eight months, the Western powers have levied severe economic sanctions on Iran.

Iran denies Western claims that it has a nuclear weapons program and says its nuclear plans are peaceful.

Iran claims new uranium deposits


Iran claimed to have uncovered new deposits of uranium ahead of talks with world powers on its nuclear capacity.

Fereydoun Abbasi-Davani, the head of the country's Atomic Energy Organization, made the announcement at an annual conference on the nuclear industry, Reuters reported Sunday, quoting Iranian media.

Abbasi-Davani told the conference that Iran will put the raw uranium “to use in the near future.”

Iran was believed to be running out of sources for raw uranium because of tough sanctions aimed at forcing the country to make its nuclear program more transparent.

Representatives of Iran are scheduled to meet this week in Kazakhstan with representatives of the United States, Russia, China, France, Britain and Germany to advance talks that would ease the sanctions in exchange for greater transparency. Iran denies Western claims that it has a nuclear weapons program and says its nuclear plans are peaceful.

The report by Reuters citing Irna, the Iranian news agency, also said that Iran had identified 16 new sites for nuclear power plants.

Separately, The Associated Press reported over the weekend that Iran claimed to have forced down an unmanned drone in its airspace.

Iran has made several such claims; they have not been verified.

The claims are significant because the ability to guide down the aircraft — as opposed to shooting them down — would suggest that Iran has the capability to breach the codes of the Western militaries that have launched the drones.

Iran talks to resume soon, reports say


Iran and the six major world powers it deals with on nuclear issues are preparing for talks, according to multiple reports.

Meetings between Iran and representatives of the United States, Russia, China, France, Britain and Germany could come as soon as the week before the New Year, the Washington Post reported over the weekend.

The six countries will offer Iran assistance on its civilian nuclear program and a lifting on a ban of the sale of airplane parts in exchange for verifiable limits on activities that could relate to a suspected nuclear weapons program, the newspaper said.

Iran, too, appears ready for new talks.

“The two sides (Iran and the world powers) have reached a conclusion that they must exit the current stalemate,” Irani Foreign Minister Ali Akbar Salehi was quoted as telling the independent Iranian Students' News Agency, according to a report Monday by Reuters.

Israel wants an end to all uranium enrichment, while the major powers have suggested that they will settle for enrichment for civilian purposes.

The Obama administration this year persuaded Israeli Prime Minister Benjamin Netanyahu's government to step back from threats of military action at least until the spring to see if tightening economic sanctions and diplomatic outreach could achieve a breakthrough.

Both governments remain in close contact on the issue. Andrew Shapiro, the assistant secretary of state for military affairs, met with Israeli officials from Dec. 12 to 14, just as news of renewed talks with Iran was leaked.

On Dec. 13, the Obama administration announced new sanctions targeting individuals and entities affiliated with Iranian nuclear research and development.

Congress is considering new sanctions, over Obama administration objections, that would target entities that circumvent banking sanctions by trading oil for bullion with Iran.

‘Robust’ EU sanctions no match for Tehran’s tricks, experts say


With embargoes on Iranian gas and oil firmly in place, the European Union seems determined to tighten a net of sanctions around Iran, as even longtime critics of Europe's trade relations with Iran acknowledge.

In a second round of sanctions this year, the European Union announced that it was prohibiting some transactions between European companies and Iranian banks and limit areas of trade “in order to choke off revenue that Iran is using for its nuclear program,” as British Foreign Secretary William Hague put it last month.

The Israeli Foreign Ministry called the EU’s new package, which slapped a fresh embargo on gas to complement July’s oil embargo, “an important step” and “strong message.”

Still, critics say that the EU’s net has large holes that allow Iran to penetrate Europe through Turkey, China and even Lebanon-based Hezbollah, among other entities. Only blanket sanctions, they say, will prevent Iran from using money from Europe to fuel its nuclear program.

In the EU process, companies suspected of being Iranian fronts can be blacklisted only after review and based on hard evidence. Obtaining such evidence requires much time and effort by intelligence agencies.

“By the time one such company is blacklisted, the Iranians have set up 10 new ones,” said Emanuele Ottolenghi of the Foundation for the Defense of Democracies in Washington.

Ottolenghi says that only an American-style trade embargo on Iran can allow the EU to catch up with Iran’s speedy turnarounds. The U.S. has had a near ban on trade with Iran since the 1980s — its trade volume of less than $200 million with the Islamic Republic consists largely of grain exports. By contrast, the EU’s volume of trade with Iran was $15 billion in 2011, which marks a 60 percent decline from 2005.

The latest EU sanctions proscribe all import of petrochemical products from Iran; export and import of weapons; nuclear and telecommunications equipment; investment in Iran’s oil industry; and trade in gold with Iran, among other measures.

Certain assets of Iran’s central bank have been seized, but transactions “related to foodstuffs, health care, medical equipment, agricultural or humanitarian purposes, personal remittances and a specific trade contract” are permitted. In total, the EU has blacklisted 471 Iranian entities.

Ottolenghi, the Italian-born former director of the American Jewish Committee’s Transatlantic Institute in Brussels, says that European companies are abiding by the EU sanctions. He expects a third round of European sanctions to be announced in the coming months.

But the Iranian workarounds to the European sanctions are numerous and ingenious, Ottolenghi says, noting a relatively simple Iranian trick: trading with Europe through Turkey, a preferred trade partner of the EU and a country that Iranians may enter without a travel visa.

As Iran’s trade with the EU plummets, its trade with Turkey is reaching record levels: $17.52 billion in the first eight months of 2012 compared to $15 billion in 2011. It stood at a mere $1 billion in 2000, according to the Turkish Statistical Institute. Iran is now Turkey’s third-largest trade partner and main country for exports.

Part of the exports may be proscribed European goods that Iran is buying from Europe through Turkish front companies that are set up and run by Iranians with Turkish nationality on behalf of the Iranian government, Ottolenghi says.

In response to EU sanctions, he says, Iran is transferring business to companies in Ukraine, Taiwan and Japan, among other countries.

“If the U.S. and the EU are serious about sanctions, they need to squeeze these countries about ties with Iran,” he said.

Just as European sanctions may be encouraging Turkey-Iran trade relations, they also may drive Iran increasingly to rely on Hezbollah for money laundering and purchases. Hezbollah is not blacklisted anywhere in Europe except in the Netherlands.

“By sanctioning Iran and not Hezbollah, the European Union is virtually inviting Iran to do business through hundreds if not thousands of Hezbollah-affiliated proxies all over the continent,” said Wim Kortenoeven, a former Dutch lawmaker and ex-Middle East researcher for the Center for Information and Documentation on Israel in The Hague.

Claude Moniquet, a former researcher for France’s foreign intelligence service and co-founder of the Brussels-based European Strategic Intelligence and Security Center, said that Hezbollah has a “very large money-laundering operation in Europe,” but added that he does not know whether Hezbollah had the capacity to handle any extra business for the Iranians in Europe.

France reportedly is resisting calls to blacklist Hezbollah in order to preserve relations with its former colony, Lebanon. Hezbollah is a powerful player in Lebanese politics.

Selective sanctions against Iran are doomed to fail, said Moniquet, “because Iran is completely opaque and there’s no way of knowing where the money goes once it reaches Iran.”

Iran’s bilateral trade with China, meanwhile, stands at $45 billion, according to the Iran-China Chamber of Commerce. Neutral Switzerland, which is resisting U.S. and EU pressure to comply with sanctions, is exporting about $330 million’s worth of machinery and pharmaceuticals per year to Iran.

Like many other countries, Turkey, China and Switzerland adhere — publicly, at least — to U.N. Security Council resolutions on Iran, but those target only Iranian entities directly involved in nuclear proliferation and human rights violations.

Nikzad Rahbar, an Iranian government spokesman, called European sanctions “a mere propaganda campaign.”

Considering Iran’s booming trade in Asia and elsewhere, the link between sanctions and Iran’s spiraling inflation and rising food prices may not be as straightforward as presented by international media coverage, some argue.

“There is no way to break down how much of it is caused by sanctions and how much is the effect of economical incompetence, corruption and grafting that is so intrinsically a part of the Iranian economical system,” Ottolenghi said.

Kortenoeven says that with Iran’s decades of experience of getting by as a pariah nation, its economy cannot be neutralized by European sanctions. Though sanctions may be compounding the troubles, the economic woes in Iran ultimately are “connected to many internal issues,” he said.

Moniquet cites poor management and a centralist, government-controlled market that discourages growth as the root of Iran’s recent financial woes.

“The sanctions are only making it harder for Iran to transcend its internal problems, but not to the point of collapse,” he said.

Simone Dinah Hartmann of the Vienna-based European coalition Stop the Bomb says the current sanctions make it more difficult for the Iranian regime to obtain nuclear weapons.

But, she said, “The goal should be making it impossible for them. We are clearly not there yet.”

Obama faces tough call on Iran oil sanctions


Just weeks after the election, President Barack Obama will be faced with a pivotal decision on oil sanctions on Iran, in which he will have to balance the need to stay tough on Tehran without pushing oil prices too high.

In considering whether to extend a new series of six-month exemptions to Washington's oil sanctions, the administration must decide whether China, India, South Korea and other nations have done enough to wean themselves from Iranian oil.

Forcing cuts that are too aggressive could fuel a new rally in oil prices, benefiting Iran and hurting allies. Accepting meager cuts risks criticism from Congress and Israel.

The sanctions are aimed at slashing Iran's oil revenues to pressure it to stop efforts to enrich uranium to levels that could be used in weapons. Tehran has said its nuclear program is strictly for civilian purposes.

On paper, the sanctions require Washington to continuously tighten the screws on Iran's exports “toward a complete cessation” of purchases, forcing importers to make deeper and deeper price and volume cuts in order to win “exceptions,” or waivers.

But the law allows the administration latitude to chart a middle ground in the sanctions, which have already proven more effective than some experts had forecast.

The sanctions require that importers must demonstrate that they are making “significant” reductions every six months, as measured by volume and price. What constitutes a “significant” reduction is at the administration's discretion.

“The point of this is that we would like to see a consistent and gradual reduction. That is the goal,” said a U.S. government official, who spoke on condition of anonymity.

Iran's oil exports hit a low of 860,000 barrels per day last month, down from 2.2 million bpd at the end of 2011. That reduction is already greater than some experts had forecast.

Critics are keeping close watch. Obama is expected to face questions about whether he has been tough enough on Iran later on Monday during a foreign policy debate with Republican candidate Mitt Romney, their last debate before the Nov. 6 presidential election.

The New York Times reported on Sunday that the United States and Iran have agreed in principle to private, bilateral negotiations on Iran's nuclear program, but both nations denied the report.

DIMINISHING RETURNS?

For countries including China, India and South Korea, the deadline for new waivers is December.

Even a key proponent of sanctions said he wonders about the need to force dramatically deeper cuts.

“We've probably reached the point of diminishing returns with respect to Iran's oil exports,” said Mark Dubowitz, the head of the Foundation for Defense of Democracies, who has pushed for stronger sanctions on Iran.

Dubowitz said it would take a great deal of work to cut global imports of Iranian oil much below 800,000 bpd. Lawmakers are now turning their attention to new types of sanctions that could more quickly hit Tehran's foreign reserves.

A QUESTION OF “SIGNIFICANCE”

So far, all major oil importers have been granted the exceptions. Without the waivers, the United States has the power to blacklist foreign banks handling the oil transactions from the U.S. financial system.

Precisely what qualifies as “significant” is kept confidential, however, and may vary from buyer to buyer.

“The law is remarkably vague about what the baseline is,” said Jeff Colgan, a professor at American University in Washington.

Japan had cut imports by 15-22 percent by the time it received its first waiver in March. It subsequently cut imports by more than a quarter each month except June, and won a second six-month waiver for the U.S. oil sanctions in September.

Senators Robert Menendez and Mark Kirk who co-authored the oil sanctions law last year have told the administration they believe a minimum cut should be about 18 percent for any nation seeking a waiver renewal, achieved through price discounts or volume reductions, a point Menendez underscored in a recent interview.

“We must make it clear – this is a big must – that absent some extraordinary circumstance, that we will not grant waivers to any nation that doesn't make our reduction benchmarks,” Menendez told Reuters earlier this month.

DELICATE BALANCE

The administration is likely to carefully weigh the cuts required against the impact on prices, since price gains help Iran, hurt allies, and harm the global economy, said Trevor Houser, a partner with Rhodium Group, a New York-based policy and economic consultancy.

“If you tighten the screws too hard and it causes oil prices to spike, then you both undermine the effectiveness of the sanctions and you erode support for the sanctions from other countries,” said Houser, a former State Department adviser.

Houser questioned how far Washington could push the sanctions while also keeping oil markets relatively stable.

Saudi Arabia, which has been pumping oil at its fastest rate in 30 years in order to make up for the diminishing exports from fellow OPEC member Iran, has limited additional capacity to tap if shipments fall further, analysts say.

The administration likely will face the most political scrutiny for its decision on a renewed waiver for China. China officially opposes the U.S. sanctions, but secured a waiver in June after a contract dispute resulted in steep import cuts in the first half.

Although its imports of Iranian oil rose in June to an 11-month high, they dropped in July and August to 25 percent below the same months in 2011, the most recent months for which data is available. China's first-half imports from Iran were down 20 percent from a year ago.

“China is a very different story and that's where we fear the administration will cook the books to give China a 'get-out-of-jail-free' card in order to avoid a showdown with America's largest creditor,” a senior Congressional aide said, on condition of anonymity.

With much bigger trade issues at stake, American University's Colgan believes a waiver for China is likely. “The trade consequences are unknown and potentially very bad if they start a trade war over this,” he said.

Ex-Malaysian PM reasserts Israel ‘rules world by proxy’


Former Malaysian Prime Minister Mahathir Mohamad said there is substance to allegations that he made nearly a decade ago that Israel rules the world by proxy.

Mohamad wrote in his blog at chedet.cc that American candidates must pledge loyalty to Israel or risk losing the elections, the Malaysian national news agency Bernama reported Monday.

“I wonder whether people notice it or not, but presidential candidates of the United States of America, the sole superpower, all have to seek approval from Israel,” Mohamad said on the blog. “Mitt Romney, the Republican candidate for president, has just made the pilgrimage, and he has made a public pledge that he will be even tougher against the Palestinians and Iran than Obama.”

Mohamad said he believes that Obama will soon make this pilgrimage and make more promises to fight for Israel, Bernama reported.

“It is not what is good for the United States which counts,” Mohamad said. “One can imagine the policies that will be adopted by whichever government or president wins, and it is clear the United States cannot ignore Israel’s views when reacting to anything of concern to Israel.”

Mohamad, long known for his anti-Semitic views and avid support for the Palestinian cause, said during a summit for the Organization of the Islamic Conference in 2003 that “the Nazis killed 6 million Jews out of 12 million [during the Holocaust]. But today the Jews rule the world by proxy. They get others to fight and die for them.”

China urges Iran ‘flexibility’ as IAEA talks begin


China urged Iran to show flexibility on the day the U.N. nuclear watchdog launched talks with the Islamic Republic over greater access to its nuclear sites.

“China hopes the Iranian side can weigh up the situation, take a flexible and pragmatic approach, have serious talks with all six related nations, and enhance dialogues and cooperation with the International Atomic Energy Agency so as to ensure the tensions can be eased through negotiations,” media quoted Chinese President Hu Jintao as telling his Iranian counterpart, Mahmoud Ahmadinejad, during Ahmadinejad’s visit Friday to Beijing.

Of the six major powers negotiating with Iran over its suspected nuclear weapons program, China and Russia have been most resistant to intensified sanctions and further isolation, while the United States, Britain, France and Germany have favored increased pressure.

In Vienna, meanwhile, Ali Asghar Soltanieh, the chief Iranian envoy on nuclear matters, met with officials of the International Atomic Energy Agency.

The IAEA officials want access to Parchin, a military complex where recent evidence suggests Iran has been developing a weapons program.

Iran insists Parchin is a conventional military facility.

Iran, big powers agree to hold more nuclear talks in June


Iran and world powers agreed to meet again in Moscow next month for more talks to try to end the long-running dispute over Tehran’s nuclear program, but there was scant progress to resolve the main sticking points between the two sides.

At the heart of the dispute is Iran’s insistence that it has the right to enrich uranium and that economic sanctions should be lifted before it stops activities that could lead to its achieving the capability to make nuclear weapons.

Western powers insist Tehran must first shut down enrichment activities before sanctions can be eased.

But both sides have powerful reasons not to abandon diplomacy. The powers want to avert the danger of a new Middle East war raised by Israeli threats to bomb Iran, while Tehran also wants to avoid a looming Western ban on its oil exports.

After discussions in Baghdad extended late into an unscheduled second day on Thursday between envoys from Iran and the six powers, European Union foreign policy chief Catherine Ashton said it was clear both sides wanted progress and had some common ground, but significant differences remained.

“We will maintain intensive contacts with our Iranian counterparts to prepare a further meeting in Moscow,” she told a news conference in Baghdad.

The next meeting, the third in the latest round of talks that began in Istanbul last month, will be held in Moscow on June 18-19.

Ashton leads the negotiations for the six-country group made up of the five permanent members of the U.N. Security Council – Britain, China, France, Russia and the United States – which together with Germany is known as the P5+1.

“Talks were intensive and long,” said Iranian chief negotiator Saeed Jalili. “They were detailed, but are left unfinished.”

“The atmosphere of these talks was positive for the two sides to talk about their issues in a clear way. We believe the result of these talks was that we were able to get to know each other’s views better and more.”

While there was little if any concrete progress, the fact that the two sides agreed to continue talks was a sign of progress in itself, after more than a year of not meeting at all before the latest round of negotiations began in April.

“The two sides’ commitment to diplomacy in the absence of any clear agreement is a positive sign,” said Ali Vaez, Iran expert at the International Crisis Group think-tank.

“All parties should be commended for returning to the negotiating table. Obama should be commended for having turned diplomacy into a process rather than the one-off meetings that existed in the past,” wrote Trita Parsi, President of the Washington-based National Iranian American Council.

“Both sides entered negotiations with their maximalist positions, and neither budged,” he said. “Looking ahead, now the hard work begins.”

The six powers want practical steps from Iran to address their concerns over its nuclear work.

Chief among such concerns is Iran’s ability to enrich uranium to a fissile purity of 20 percent. That is the nuclear advance most worrying to the West since it opens the way to reaching 90 percent, or bomb-grade, enrichment.

“Iran declared its readiness to address the issue of 20 percent enrichment and came with its own five point plan, including their assertion that we recognize their right to enrichment,” Ashton said.

IRAN INSISTS ON ITS RIGHTS

Iran says it will not exceed 20 percent and the material will be made into fuel for a research reactor.

Iran has hinted at flexibility on higher-grade enrichment but Iranian media said it would not give away its most potent bargaining chip without significant concessions on sanctions.

“We never expected to get that agreement (on 20 percent) here in Baghdad,” said a senior U.S. administration official who declined to be identified due to the sensitivity of the subject.

But, he said “there is agreement to address all aspects of 20 percent as we put it on the table”.

A significant difference between the two sides is Iran’s insistence on what Jalili called “an undeniable right of the Iranian nation” to enrich uranium.

“Obviously (that) was not something we were prepared to do,” the official said, echoing the U.S. view that Iran does not automatically have this right under international law because, it argues, Iran is in violation of its obligations under counter-proliferation safeguards.

The United States and its allies suspect Tehran is trying to develop a nuclear weapons capability and have imposed tough sanctions on Iran’s energy and financial sectors to try to force it to compromise and open up its activities to scrutiny.

EU states are set to introduce a total embargo of Iranian crude oil purchases in July. Diplomats say that potentially persuasive measure will not be cancelled unless Tehran takes substantial steps to curb its nuclear activities.

U.S. Secretary of State Hillary Clinton said there would be no let up in sanctions against Iran, even as talks continue.

“As we lay the groundwork for these talks, we will keep up the pressure as part of our dual-track approach,” she told reporters in Washington hours after the talks ended in Baghdad. “All of our sanctions will remain in place and continue to move forward during this period.”

The senior U.S. official said the six powers were going to try to advance the talks “as fast as we can”. But it was too early to talk about technical level or expert meetings because the political issues still needed to be clarified.

The official said sanctions coming into effect in coming weeks would increase leverage on Iran in the negotiations.

“Maximum pressure is not yet being felt by Iran,” the official said, adding there were many other potential sanctions that remained to be employed.

WORRIES ABOUT WAR

The powers want Iran to send its more highly refined uranium abroad and close an underground plant devoted to 20 percent enrichment which is largely invulnerable to air strikes.

In return, the United States, Russia, China, France, Britain and Germany have offered fuel to keep Iran’s medical isotope reactor running, assistance in nuclear safety and an end to an embargo on spare parts for Iran’s ageing civilian aircraft.

Rising tension over the past year has pushed global oil prices upwards as the West has broadened sanctions to bar Iran’s crude exports and the specter of Middle East war has increased with the threat of possible Israeli strikes on Iran’s nuclear installations.

Israel is believed to be the only Middle East country with nuclear weapons but regards Iran’s nuclear aspirations as a mortal threat given its calls for the demise of the Jewish state.

Iran, the world’s No. 5 oil exporter, says it is enriching uranium only in order to generate electricity to serve the needs of a burgeoning population, and for a medical research reactor.

The Islamic Republic has repeatedly ruled out suspending all enrichment as called for by several U.N. Security Council resolutions, saying nuclear energy is a matter of national sovereignty and pride in technological progress.

Additional reporting by Patrick Markey and William Maclean in Baghdad, Marcus George and Isabel Coles in Dubai, Zahra Hosseinian in Zurich, Fredrik Dahl in Vienna and Paul Eckert in Washington; Writing by Mark Heinrich and Jon Hemming; Editing by Angus MacSwan and Giles Elgood

Iran talks show common ground, disagreement


A first day of talks between Iran and world powers about a nuclear program that the West suspects is aimed at nuclear bomb research showed a “fair amount of disagreement” but also areas of common ground, a senior U.S. official said.

“I believe we have the beginning of a negotiation,” the official said of the talks, which opened on Wednesday and lasted late into the evening. “But still we have to come to closure…about what are the next appropriate steps.”

Iran was “engaged” in the discussions, and the meeting would continue into a second day on Thursday, the official said, adding that there was “plenty to go on” for a potential further round of talks.

Earlier on Wednesday, envoys for Iran and the United States, Russia, China, France, Britain and Germany exchanged unusually detailed proposals at the talks in Baghdad in hopes of defusing a long standoff over suspicions Tehran’s atomic energy program may be a disguised quest for nuclear weapons.

Both sides have been publicly upbeat about the scope for an outline deal following a 15-month diplomatic freeze and exploratory talks in Istanbul last month.

Reporting by Andrew Quinn; Editing by Michael Roddy

Major powers and Iran start nuclear talks in Baghdad


The major powers launched a new round of talks with Iran on its suspected nuclear weapons program.

The sides hope to emerge from the session in Baghdad on Wednesday with the outline of a plan that would lead to increased Iranian transparency in exchange for a degree of relief on sanctions.

Iran experts say that the major powers, including the United States, Russia, China, Britain, France and Germany, may offer a deal that requires Iran to give up enriching uranium to 20 percent, a few steps shy of weaponization, in exchange for being allowed to enrich uranium to 3.5 percent for medical and research purposes as well as an intrusive regimen of inspections.

Iran indicated Tuesday that it may soon agree to allow United Nations inspectors to examine its nuclear facilities.

Israel wants all enrichment to stop and the dismantling of a reactor near the Shiite holy city of Qom uncovered in 2009 by Western intelligence.

Iran insists its nuclear program is for peaceful purposes. Western powers cite increasing evidence of a weapons program, including signs that Iran is testing a trigger mechanism for a bomb.

Iran nuclear concession would test big power unity


Facing an imminent toughening of sanctions, Iran is hinting at a readiness to give some ground in its long nuclear stand-off with world powers, but any flexibility could split their ranks and lead to protracted uncertainty about how to respond.

The stakes are high, for the longer the impasse goes on, the closer Iran will get to the technological threshold of capability to develop atomic bombs, raising the odds of last-ditch Israeli military strikes on its arch-foe and the risk of a new Middle East war a troubled global economy cannot afford.

A succession of optimistic statements by Iranian officials and academics has raised speculation that Tehran may offer concessions to its six main negotiating partners in talks scheduled for May 23 in Baghdad, a move that could ease regional tensions and soothe fears of a fresh spike in oil prices.

Such an offer would also be closely studied by Israel, which has threatened to use force to destroy nuclear installations the Islamic Republic says are purely civilian in nature but the West suspects are geared to gaining a weapons capability.

Any talk of a diplomatic breakthrough, though, is almost certainly premature.

Whatever concrete gestures are tabled by Iran would test anew the cohesiveness of joint Western, Russian and Chinese efforts to prevent an Iranian atom bomb capability, and might simply lead to months of inconclusive consultations among its interlocutors about how to answer Tehran’s move, analysts say.

Differences in how best to match an Iranian offer – for example by suspending some sanctions in return for Iran shelving enrichment of uranium to 20 percent purity, a level that worries U.N. nuclear experts – could snag efforts to turn any such initiative into meaningful movement towards negotiations.

“Don’t expect a ‘Kumbaya’ (celebratory) moment. It’s going to be a poker play” between Iran and the major powers, French analyst Bruno Tertrais said. “I would be surprised if what happens in Baghdad was more than an agreement on interim steps.”

ISOLATION

There is “no doubt ” that Iran’s policy would be to split the six, known as the P5+1, says Dennis Ross, until November a chief Middle East strategy adviser at the White House.

“I also have no doubt that they probably will put something on the table that they think will be attractive to some of the members of the P5+1,” Ross told an audience at the Bipartisan Policy Center in Washington.

He said one such move could be Iranian assurances on a halt to stockpiling of 20 percent enriched uranium.

That level, well beyond the 5 percent of fissile purity suitable for running civilian nuclear power plants, is intended only to replenish the fuel stocks of a medical isotope reactor, Iran says. But it also moves Iran farther down the road towards the highly enriched grade of uranium usable in bombs.

One Western government assessment is that it would take Iran two to three years to manufacture a usable nuclear weapon in the event that authorities in Tehran decided to attempt that task.

Analysts and some diplomats have said Iran and the global powers must compromise for any chance of a long-term settlement, suggesting Tehran could be allowed to continue limited low-level enrichment if it accepts more intrusive U.N. inspections.

But Iran has often managed to limit its diplomatic and economic isolation by sowing rifts among the six states spearheading international efforts to rein in Iran’s nuclear program, leading to a watering-down of U.N. sanctions.

Western analysts are on alert for any new such gambit now.

A united front among Russia, China, the United States, France, Germany and Britain is the most powerful leverage the outside world has in ensuring Iranian compliance with international safeguards intended to curb the proliferation of nuclear weapons, Western analysts say.

And yet that unity has always been fragile.

Russia and China, which both have strong trade ties to Iran, have supported four rounds of U.N. sanctions imposed since 2006 on Iran over its refusal to suspend enrichment-related activity and grant unfettered U.N. inspections to resolve suspicions of military dimensions to its nuclear program.

But Moscow and Beijing criticized the United States and the European Union last year for meting out extra unilateral sanctions against Iran. Russia has made clear its opposition to any further U.N. Security Council measures against Tehran.

“I think P5+1 will have significant problems whenever it comes to Iran actually moving and how they respond,” a European diplomat told Reuters. “At this moment in time it is easy and nothing has been promised by Iran … but I think it will become very difficult and very tense on the P5+1 side once they have to start reacting to an Iranian step.”

“EARLY TEST OF UNITY”

Mark Fitzpatrick of London’s International Institute for Strategic Studies said an Iranian demand for an easing of sanctions in return for its concessions “will present an early test of P5+1 unity. For the West, any lifting of sanctions would require significant limitations on the enrichment program.”

There is little debate about what may be encouraging Iran to indicate new flexibility: Iran, analysts say, wishes to stave off the planned July 1 start to a European Union ban on imports of Iranian oil, a significant measure since the EU takes a fifth of the country’s petroleum shipments.

But there is plenty of speculation about the extent to which Russia and China are prepared to reward any Iranian shift.

Shashank Joshi of the Royal United Services Institute said divergence between Russia and China and its other partners would likely emerge on the price the world should demand for dropping the insistence, enshrined in the Security Council resolutions, that Iran cease any enrichment whatsoever.

He said the United States would want to see the dismantling of an enrichment plant buried deep under a mountain at Fordow south of Tehran, the Iranian nuclear site best sheltered from any possible air strike.

“The Russians and Chinese may recognize that this is unlikely, and may accept Iranian offers short of this,” he said.

“So we should expect to see Iran attempt to split the Russians and Chinese from the others by offering something concrete and significant, but short of dismantlement.”

Tehran has ruled out closing the bunkered Fordow site.

SIGNS OF NEW IRANIAN APPROACH

Diplomats and analysts say an agreement is still far off, but the signs are growing that Iran’s leaders are changing their approach and preparing public opinion for a potential shift.

Tehran’s former chief nuclear negotiator, Hossein Mousavian, now a visiting scholar at Princeton University in the United States, said last month Iran and major nations had a “historic opportunity” to settle their decade-old nuclear dispute.

On May 2, Deputy Foreign Minister Mohammad Mahdi Akhondzadehhe said in a speech in Vienna: “We continue to be optimistic about upcoming negotiations.”

In April, Foreign Minister Ali Akbar Salehi said Iran was “ready to resolve all issues very quickly and simply”.

Editing by Mark Heinrich

Obama responds to Netanyahu’s Iran ‘freebie’ comment


President Obama responded to Israeli Prime Minister Benjamin Netanyahu’s claim that world powers gave Iran a “freebie” by agreeing to hold more talks.

“We’re going to keep on seeing if we make progress. Now, the clocking is ticking and I’ve been very clear to Iran and to our negotiating partners that we’re not going to have these talks just drag out in a stalling process. But so far at least we haven’t given away anything,” Obama said late Sunday during a news conference in Cartagena, Colombia.

“The notion that somehow we’ve given something away or a ‘freebie’ would indicate Iran has gotten something. In fact, they’ve got some of the toughest sanctions that they’re going to be facing coming up in just a few months if they don’t take advantage of these talks,” Obama added.

Talks between Iran and the six world powers – the United States, Britain, France, China, Russia, and Germany – on Iran’s nuclear program resumed on April 14 after more than a year’s hiatus. The sides agreed to meet again on May 23 in Baghdad.

“My initial impression is that Iran has been given a freebie. It’s got five weeks to continue enrichment without any limitation, any inhibition,” Netanyahu said Sunday in Israel.

Iran says its nuclear program is for peaceful purposes; the Western world fears that Iran may be enriching uranium in order to produce a nuclear bomb. Netanyahu has called on the international community to halt Iran’s nuclear production by force if necessary, and has warned that the window in which to prevent Iran’s production of a nuclear bomb is rapidly closing.

Israel takes concerns about Iran to key partner China


Israel on Friday took its concern about Iran’s nuclear programme to one of Iran’s main partners, China, and hinted it could launch a preemptive attack on the Islamic Republic despite repeated calls by China to allow diplomacy to take its course.

China, which has close energy and trade ties with Iran, has urged a negotiated solution to the dispute over Iran’s nuclear ambitions and long opposed unilateral sanctions on Iran.

Iran insists its nuclear energy programme is purely non-military and has been adamant it will not abandon it under external pressure.

“For us, it’s crucial to explain our position to our Chinese partners,” Israeli Foreign Minister Avigdor Lieberman told reporters on a visit to Beijing.

“It’s crucial to clarify our position to China in the hope they understand our concerns, our problems,” he said, adding that Israel would “continue the dialogue” with China.

Chinese Premier Wen Jiabao warned Iran in January against any effort to acquire nuclear weapons but apart from that, China has shied away from speaking out strongly against Iran.

That position on Iran underscores the tricky path China is trying to steer between pressure from the United States and its allies and, on the other hand, expectations from Iran, which looks to China as a sympathetic power and a big oil customer.

But an increasingly tough-talking Israel is threatening to take military action, with or without U.S. support, if Iran is deemed to be continuing to defy pressure to curb its nuclear projects.

Speculation is growing that Israel could launch some form of strike against Iranian nuclear installations, which Israel sees as a threat to its existence.

“We prefer that the international community will resolve the Iranian issue through talks, P5+1, through some negotiations, sanctions etcetera,” Lieberman said.

“But if not, I think it’s our right to protect ourselves, to defend ourselves,” he added. “As I mentioned, we keep all options on the table.”

The P5+1 group, made up of the United States, Britain, France, Russia, China and Germany, accepted an offer last week from Iran for new talks on its nuclear energy programme.

Lieberman said Israel was hopeful of “positive progress” at the talks.

But despite Western sanctions inflicting increasing damage on Iran’s oil-based economy, Israel had not seen “readiness from the Iranian side to give up their nuclear ambitions or to stop their enrichment”, he said.

China has also resisted Western efforts to exert pressure on Iran by imposing sanctions on its oil exports, much of which flows to China.

Editing by Ben Blanchard and Robert Birsel

Senators press Obama on China-Iran


A bipartisan slate of U.S. senators pressed the Obama administration on its policy on China’s dealings with Iran.

The letter, signed by 10 senators and first reported last week in Foreign Policy, lists foreign entities—most of them Chinese—dealing with Iran’s energy sector.

The senators called on the Obama administration to implement a law passed last summer that expands sanctions to third parties dealing with Iran’s energy sector.

“We cannot afford to create the impression that China will be given free rein to conduct economic activity in Iran when more responsible nations have chosen to follow the course we have asked of them,” said the letter, which was initiated by Sens. Jon Kyl (R-Ariz.) and Robert Menendez (D-N.J.).

The Obama administration had unsuccessfully sought exemptions for China and Russia in last year’s legislation; instead the law includes a national security waiver.

The White House wanted the exemptions because support from China and Russia was key to expanded U.N. Security Council sanctions passed earlier in the year. The U.N. sanctions resolution provided the legal basis for targeting third parties that deal with Iran’s energy sector.

The senators’ letter, the latest in a number of letters from Congress urging the White House to press China on its Iran dealings, asks for clarifications on the criteria the White House would use to trigger a national security waiver.

China agrees to look into sanctions busting


China agreed to investigate U.S. findings that some of its companies were assisting Iran in its efforts to develop nuclear weaponry.

“We did provide some information to China on specific concerns about individual Chinese companies, and the Chinese assured us that they will investigate,” State Department spokesman P.J. Crowley said Monday.

Crowley was addressing a Washington Post report that State Department’s sanctions enforcer Robert Einhorn recently handed China a list of companies that allegedly were helping to advance Iran’s missile program and to make more efficient centrifuges required to process uranium.

On Tuesday, the Associated Press quoted Chinese officials as saying that they were “honest” in their efforts to abide by United Nations sanctions on Iran.

Attempt to pressure China on Darfur loses to the Olympics


Sudan’s president may soon be the target of an arrest warrant for the killings in Darfur, and Iran was blasted by the United States and Europe for testing the missiles it threatens to fire at Israel. But the international player accused of complicity in both developments appears to be getting a pass.

China has used its veto powers in the U.N. Security Council to block strong international action against the regimes in Tehran and Khartoum and has thrown them lifelines by continuing oil and arms trade, despite Western attempts at isolation.

Jewish groups have taken lead roles in drawing attention to China’s policies and specifically sought to spotlight the country’s record in advance of this summer’s Olympic Games in Beijing. Yet it appears as if China will suffer no significant international sanction when the games open Aug. 8.

President Bush will be on hand for the opening ceremony, despite calls from the American Jewish World Service and the Jewish Council for Public Affairs that he stay home. Joining Bush will be Israeli President Shimon Peres, who has said that a nuclear Iran would be “a nightmare” and that international unity, which China has played a key role in blocking, could make military action unnecessary.

Calls for boycotts of the Olympics, some with comparisons to Nazi Germany’s hosting of the 1936 Berlin games, also have been rejected by mainstream Jewish organizations. The Anti-Defamation League and the American Jewish Committee both warned that challenging Beijing during the Olympics would not produce the anticipated results.

“The only thing that can affect China is the big Western powers in unison, but they will never do that,” said Raphael Israeli, a professor of Islamic and Chinese history at Hebrew University in Jerusalem. “Only then would the Chinese do something as a gesture. They can absorb a lot if they don’t have to do anything practical.”

Just a few months ago, the value of the Olympics as a showcase for China’s exploding economic power seemed in danger of running aground. In addition to reports questioning the quality of Beijing’s air for elite athletes, some tried to brand the games the “Genocide Olympics” because of Chinese ties with Sudan.

Jewish filmmaker Steven Spielberg withdrew as an artistic adviser to the games, saying “conscience will not allow me to continue with business as usual.” Riots in Chinese-occupied Tibet led Elie Wiesel to organize fellow Nobel laureates to protest China’s brutal crackdown. In addition, a group of 185 Jewish leaders, mostly rabbis, called on Jewish tourists to stay away from Beijing.

As the Olympics draw closer, however, even activists are quietly admitting they are likely to go off without much of a hitch.

“It’s been frustrating,” said Rabbi Steve Gutow, executive director of the Jewish Council for Public Affairs, “because it doesn’t appear we’re being listened to.”