U.S., Europeans Discuss Iran Incentives Program

WASHINGTON -- The George W. Bush administration is holding talks with its European allies on a possible package of economic incentives for Iran, including access to imported nuclear fuel, in return for suspension of uranium enrichment activities that are suspected to be part of a nuclear arms program, European and U.S. diplomats said Monday.

The diplomats said that while the administration had not endorsed any incentives for Iran, it was not discouraging Britain, France and Germany from assembling a package that the administration would consider after the U.S. presidential election on Nov. 2, for likely presentation to Tehran later in the month.

Any support of a package of incentives, even if it is to be offered only by the Europeans, would indicate a significant shift in the Bush administration's policy of demanding penalties, but not offering inducements, to get Iran to halt activities that are suspected to be for a nuclear arms program.

European diplomats said that the administration was very squeamish about even discussing incentives, in part because it would represent a policy reversal that would provoke a vigorous internal debate, and in part because of the presidential campaign. Senator John Kerry, the Democratic candidate, has made Iran an issue, criticizing the administration for not working more closely with European nations. Kerry has said that if elected, he would endorse a deal supplying Iran with civilian nuclear fuel under tight restrictions and would press for sanctions if Iran refused.

Under prodding from the United States, the International Atomic Energy Agency has set late November as the deadline by which Iran must comply with demands that it do more to disclose its nuclear activities. The United States wants to send the matter to the United Nations Security Council for discussion of sanctions if there is no compliance.

Because there might not be enough votes for sanctions on the Security Council, sanctions might only be adopted by the United States, Britain, France, Germany and Japan.

"If there is going to be a substantial Iran policy, it has to have incentives for Iran, or it may not work," said a European diplomat. Another European diplomat said that whatever the Europeans come up with next month "will not come as a surprise" to Washington.

The package being discussed would, among other things, let Iran import nuclear fuel from Russia for its reactor at Bushehr, under an agreement in which Russia would then re-import the spent fuel and store it. In return, Iran would suspend its enrichment of 37 tons of yellowcake, which is nearly raw uranium.

In addition, the package would lift a ban on exports to Iran of certain badly needed civilian aircraft parts, without which its fleet of civilian airliners has been virtually grounded.

The discussions also concern what to do if Iran turns down the offer, European officials said. One possible step under discussion would be to circumvent the United Nations Security Council, because two members of that body with vetoes, Russia and China, oppose sanctions. Instead, the United States, Britain, France, Germany and Japan, the five biggest economic powers in the world, would impose penalties on Iran.