AUSTRIA: A last-ditch attempt to find a formula to end the dangerous stand-off over Tehran's nuclear programmes got under way yesterday, with optimistic talk of an agreement to revive negotiations that broke down in January.
But Iran and the West continued to trade verbal blows and headed towards confrontation over the US and European resolve to shift the dispute to the UN security council in New York this week, launching a process that could result in sanctions.
Tehran is threatening to retaliate with full-scale uranium enrichment.
Behind the scenes at the International Atomic Energy Agency (IAEA) the search appeared to be on for a deal to at least give the parties some breathing space.
Opening a meeting of the 35-strong IAEA board, agency chief Mohammed ElBaradei said he was optimistic a deal could be struck this week and emphasised that a key issue was defining nuclear "research and development", which Iran says it will not give up.
Research and development refers to low-level work on uranium enrichment. The Europeans and the Americans are demanding Iran freezes all enrichment work before its negotiations with the EU can be resumed.
A US state department official said Washington wanted the security council to tackle the Iranian challenge "sooner rather than later".
Iran responded by warning that security council action would kill off all chances of a negotiated settlement and provoke it to embark on large-scale enrichment. This is the best route to a nuclear bomb, although Iran insists its programmes are peaceful.
While US and European officials insisted no talks were taking place with Iran, senior officials close to the IAEA said the opposite and that Germany, France and Russia were keen to explore Iranian proposals.
"There is a lot of dialogue going on to try to reach an agreement on modalities for Iran and the EU to go back to the negotiating table," Dr ElBaradei said.
Western diplomats said the IAEA chief supported an arrangement under which Iran would stop uranium enrichment for two years, resume talks with the EU on an overall settlement of the row, agree to intrusive agency inspections of its programmes, but be allowed to operate a small number of centrifuges for research.
Such a deal would be a victory for Iran, but would also enable the West to keep a closer watch on Iran and slow its progress.
European and US officials, however, insisted the Iranians had to reinstate a full freeze on enrichment and also made plain that two years was too short a period for "restoring confidence" in Iran's plans.
"R&D makes it sound innocent and peaceful. We don't consider their programme to be innocent and peaceful," said the US state department source.
For three years, the bottom line of western strategy has been to deny Iran uranium enrichment because it is the key to acquiring the know-how for a nuclear bomb. "R&D is an issue which is very much divisive," said Dr ElBaradei.
"Both parties are taking a hard position."