Iran 'to retaliate' if sent to UN

TEHRAN, Wednesday (Reuters) Iran's president confirmed his government would start enriching uranium and end U.N. snap inspections of nuclear facilities if its case were referred to the U.N. Security Council.

Iranian lawmakers on Sunday overwhelmingly voted these retaliatory measures into law, attempting to give the Islamic Republic some leverage before a board of governors meeting of the International Atomic Energy Agency (IAEA) on Thursday.

"We follow the parliament and will definitely implement its bills," President Mahmoud Ahmadinejad told state television.

Iran risks referral to the Security Council for possible sanctions after failing to convince the world its atomic scientists are working on power stations rather than warheads.

However, EU diplomats have said they are not going to push for Iran to be referred to the world body at this week's IAEA meeting.

Iranian officials have consistently insisted Iran has a right to a full fuel cycle and must be allowed to enrich uranium.

Ahmadinejad said Iran would stand by its rights but made no specific mention of the Russian plan. "Should we step back from our independence, freedom and territorial integrity? We should not," he said.

Meanwile European Union powers are ready to revive nuclear talks with Iran to discuss a Russian proposal aimed at defusing an impasse over what the West believes is an Iranian atomic bomb programme, diplomats said.

Under Russian President Vladimir Putin's proposal, Iran would be allowed to continue converting uranium ore but would ship it to Russia for enrichment, a system which, in theory, would prevent Iran from producing weapons-grade uranium.

Iran, whose president last month said Israel should be "wiped off the map", denies Western allegations that it has a clandestine nuclear bomb programme and insists its nuclear ambitions are limited to the peaceful generation of electricity.

"We are considering a meeting in December in Vienna. The Iranians would have to say they want to meet and talk about the Russian proposal," a diplomat from the so-called EU3 - France, Britain and Germany - said on condition of anonymity.

He said the EU3 were prepared to make a major concession in the interest of resuming dialogue with Iran - they would be willing to meet even if Tehran did not reinstate a suspension of uranium processing activities at its Isfahan plant.

The trio had made this a condition of restarting talks, but Tehran has so far ruled out halting work at Isfahan.

Britain confirmed that a meeting with the Iranians was under consideration.

"We will consider next steps, including a possible meeting with the Iranians after the board," a British Foreign Office spokesman said, referring to Thursday's meeting of the International Atomic Energy Agency's board of governors on Iran.

No official comment was available from Tehran. However, EU officials said Iran would probably react positively, given that the Europeans and Americans were prepared to drop their demand that all work at Isfahan be halted before talks resumed.

Other EU3 officials confirmed a meeting was under consideration, but said many aspects - including the timing, the venue and the seniority of officials who would attend - were unclear and warned that it might never take place.

On Monday, EU and U.S. officials said they would not push the IAEA's 35-nation board to refer Iran this week to the U.N. Security Council for possible sanctions, as the Western powers had previously threatened to do.

The officials cited a desire to allow Iran more time to think about the Russian plan.

Last week, U.S. President George W. Bush said he backed Putin's initiative.

The proposal would allow Iran to continue converting uranium ore into gas at Isfahan if the most critical stage of nuclear fuel production - uranium enrichment - was transferred to Russia as part of a joint venture. In exchange, Iran would get economic and political benefits.

Iran has not formally rejected the Russian idea but has stressed repeatedly that it aims to enrich uranium domestically, calling this a sovereign right it would never renounce.

Meanwhile a nuclear plant being built by Russian engineers in Iran is not yet ready to receive its first shipment of nuclear fuel, a senior Russian official said Tuesday.

Moscow has previously said that first deliveries of fuel to the controversial nuclear station would take place around the end of this year or start of 2006.

"The Bushehr plant is not at present technically ready to receive nuclear fuel," Alexander Shmygin, the newly-appointed chief of Russia's atomic energy agency, was quoted by the state RIA-Novosti news agency as saying.

He said it would be "very difficult" to store the fuel in the Gulf region until the Bushehr plant was ready to receive it, but did not elaborate.

"We will ensure the fuel remains secure in a Russian facility," he said.