Western leaders warn Iran over nuclear site

PITTSBURGH/VIENNA (Reuters) - U.S. President Barack Obama and the leaders of Britain and France accused Iran on Friday of building a secret nuclear fuel plant and threatened tough new sanctions unless Tehran comes clean about its nuclear program.

Sharpening a standoff with the Islamic Republic, Obama went public with the charge standing shoulder to shoulder with British Prime Minister Gordon Brown and French President Nicolas Sarkozy at a Group of 20 summit in Pittsburgh.

"Iran is breaking rules that all nations must follow ... and threatening the stability and security of the region and the world," Obama said a week before Tehran's much-anticipated talks with the United States and five other powers known as the "P5+1" negotiations.

A defiant Iranian President Mahmoud Ahmadinejad insisted his country's second uranium enrichment site was within the parameters of the U.N. nuclear watchdog's rules and that he would have no problem allowing international inspections.

"It's not a secret site," Ahmadinejad told a news conference in New York, saying the United States, Britain and France would "regret" their accusations.

Ahmadinejad said Israel "wouldn't dare to attack" Iran and that Iranians were able to defend themselves.

Iran acknowledged the existence of the facility for the first time on Monday in a letter to the International Atomic Energy Agency, a belated disclosure U.S. officials said was meant to beat Western governments to the punch.

Western leaders hope the latest development will give them greater leverage with the international community to impose new sanctions on Iran if it remains resistant. But the diplomatic offensive could also further entrench Tehran's defiance.

The revelation of the site, under construction inside a mountain close to the holy city of Qom, intensified Western fears of an Iranian bid for nuclear weapons. Tehran insists its nuclear program is for peaceful electricity generation.

Obama said Iran's action "represents a direct challenge to the basic foundation of the nonproliferation regime."

Brown accused Iran of "serial deception" in its nuclear program and Sarkozy said Tehran had until December to comply or else face new international sanctions.

Russian President Dmitry Medvedev, who had softened his opposition to sanctions in talks with Obama in New York this week, agreed Iran was in violation of U.N. resolutions and called on it to quickly prove its nuclear program was purely peaceful.

China urged Iran to cooperate with the U.N. inspectors but said it still wanted a negotiated solution.

German Chancellor Angela Merkel said her country was "very worried" and that world powers must not shy away from imposing further sanctions on Iran if the talks on October 1 failed.

COMMITTED TO ENGAGEMENT

Since taking office in January, Obama has sought to engage Iran diplomatically but has been met mostly with defiance.

"It is time for Iran to act immediately to restore the confidence of the international community by fulfilling its international obligations," Obama said. "We remain committed to serious, meaningful engagement with Iran to address the nuclear issue through the P5+1 negotiations."

The IAEA said earlier on Friday that Iran had just told it of a second uranium enrichment plant under construction.

A senior U.S. official said it appeared the facility was at least a few months from having all centrifuges installed and operable. The nascent plant was believed to be designed for about 3,000 centrifuges for enriching uranium.

U.S. officials said Iran started building the covert plant to have an alternate site for possible weapons development since the IAEA's scrutiny at its already-known Natanz facility made it difficult to conduct such activities there.

They said Iran had just learned that U.S., French and British intelligence were aware of the site, so it divulged its existence to the IAEA because it feared the information would soon be made public.

The IAEA asked Iran to provide access to and information about the plant as soon as possible.

IAEA spokesman Marc Vidricaire said Iran had stated it intended to enrich uranium at the new plant, like its Natanz complex that was hidden from the IAEA until 2002, only to the 5 percent level suitable for power plant fuel.

"The agency also understands from Iran that no nuclear material has been introduced into the facility," he said.

SHARING INTELLIGENCE

The disclosure, extending a history of Tehran withholding nuclear plans from U.N. inspectors, gave grist to Western calls to consider tougher U.N. sanctions against Iran ahead of the October 1 talks in Geneva with six world powers.

These talks will be a "serious test" of Tehran's willingness to address concerns about the new plant, a U.S. official said.

Obama shared intelligence on the Iranian plant with Medvedev at their talks in New York this week, the U.S. official said. China was only just informed about it but U.S. ally Israel had already known about it, the official said.

Sarkozy said Iran was taking the international community down a "dangerous" path and threatened new sanctions if Iranian leaders did not change course by December.

Brown said Iran's defiance should harden the resolve of the international community, which must now "draw a line in the sand" against Tehran.

Iran is under U.N. sanctions for refusing to suspend enrichment and denying access the IAEA needs to clarify Western intelligence indications that Iran has geared nuclear research to developing nuclear bombs, not generating electricity.

The head of the Organization of the Islamic Conference warned the international community "not to make the same mistake" in dealing with Iran's nuclear program as it did with Iraq's supposed weapons of mass destruction, which cleared the way for the U.S. invasion in 2003.

"We have to see what are the IAEA reports and evidence," said Ekmeleddin Ihsanoglu, a Turk who heads the 57-member OIC.

(Additional reporting by William Maclean in London and Matt Spetalnick in Pittsburgh; Editing by Howard Goller and John O'Callaghan)