The governing board of the UN nuclear watchdog today unanimously approved a third term for Mohamed El Baradei as the agency's chief after Washington gave up its efforts to oust him.
"The board approved the reappointment of Dr. El Baradei by consensus," said International Atomic Energy Agency spokesman, Melissa Fleming, after the closed-door board meeting.
The United States lost the battle to depose El Baradei, but it has not given up its fight against Iran's nuclear programme, which Washington says is a front to develop nuclear weapons.
Iran denies this, insisting its atomic ambitions are limited to the peaceful generation of electricity.
"The US has taken the most graceful way out of this situation," a Western diplomat said before the IAEA board meeting. "It has decided to back El Baradei in exchange for what it hopes will be a tougher stance on Iran," the diplomat said on condition of anonymity.
Washington had said it opposed the reappointment of the 62-year-old Egyptian, who has run the IAEA since 1997, because it believes UN agency heads should have only two terms. But UN diplomats say the real reason is that the US believed he was soft on Iraq and Iran.
Diplomats at the Vienna-based IAEA denied El Baradei had cut a deal with the Americans to win their support for another four-year term when the 35 nations on the IAEA board voted.
The next major item on the agenda of the week-long meeting will be a speech by El Baradei's deputy, Pierre Goldschmidt, who will inform the board about progress in the IAEA's two-year probe of Iran.
"It's going to be a tough report," a European diplomat familiar with Goldschmidt's draft speech told reporters. "The Iranians are furious about it."
He said Goldschmidt's speech, expected in the middle of the week, was given to the Iranians on Friday. On the positive side, it confirmed that Iran had kept its promise to suspend sensitive nuclear activities, he said.
But it criticised Iran for, among other things, failing to cooperate completely with the IAEA probe, the diplomat said. For example, Iran had failed to provide complete declarations on nuclear-related shipments, he said.
The EU's three big powers - France, Britain and Germany - share US suspicions that Iran wants nuclear weapons and are determined to prevent Tehran mastering the science of uranium enrichment, a process of purifying uranium for use as fuel in nuclear power plants or in weapons.