Iran rules out offer as nuclear dispute worsens

IRAN: Iran rejected a Russian compromise deal aimed at resolving the crisis over its suspect nuclear programme yesterday, dashing…

IRAN: Iran rejected a Russian compromise deal aimed at resolving the crisis over its suspect nuclear programme yesterday, dashing hopes for a face-saving outcome to its confrontation with the West.

As the UN nuclear watchdog finalised a decision to report Iran to the UN security council last night, Javad Vaeedi, the deputy head of Iran's national security council, said the US and European countries were making a "historic mistake".

An emergency meeting of the board of the International Atomic Energy Agency (IAEA) is expected to adopt a resolution reporting Iran to the security council this morning. The decision marks a watershed in the three-year dispute.

"We are trying as best we can to secure as broad as possible consensus on the board for reporting Iran," said a diplomat.

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"The resolution is being revised," a senior diplomat close to the IAEA said earlier.

"Once this is on the agenda of the security council we foresee a graduated approach to bring additional pressure on the leadership in Tehran to achieve a negotiated settlement," US ambassador Gregory Schulte told reporters.

Asked about the haggling, a Western diplomat said: "The threat [ to restrict inspections] is on everyone's minds, but we consider it blackmail and if we give in to that, there's no end to it."

He said the consultations focused on clarifying clauses in the resolution that developing states argued could be construed as ending IAEA oversight of Iran and opening the way to sanctions before the UN agency ends its investigation of Iran's atomic project.

The Iranians were scheduled to go to Moscow in two weeks to discuss a proposal for Russian manufacture and guaranteed supplies of nuclear fuel for Iran.

The decision to take the dispute to New York raises the stakes in the long-running row and heightens the sense of escalating confrontation between a hardline regime in Tehran and the international community, united for the first time about how to channel its anxiety over Iran's nuclear programmes.

Reacting furiously, the Iranians also announced they would be restricting UN inspection rights of their nuclear programme and restarting enrichment of uranium at their complex at Natanz.

Senior IAEA officials said Tehran had already told the Russians they were calling off the talks with Moscow.

The Russian proposal was the best hope of defusing the worsening crisis but appeared dead last night.

The Iranian president, Mahmoud Ahmadinejad, accused Russia of patronising Iran and treating it like a "medieval country".

The Russian foreign minister Sergey Lavrov said Iran should not insult Russia's attempts to act as an honest broker