Nuclear row diverts focus from Iran unrest

BEIRUT (Reuters) - Iran's hardline leaders will aim to gain time for the nation's nuclear program at talks with six world powers in Geneva Thursday and to shore up their own credibility at home after months of post-election turmoil.

Despite the risk of harsher sanctions, Iranian leaders may feel more confident dealing with matters of national pride, prestige and military deterrence than with the internal schisms exposed by the disputed presidential vote in June.

"The leadership can go to the negotiations more sure-footed than at any time since the election," said Iran analyst Baqer Moin, noting that the Islamic Republic had long used external crises to paper over internal divisions. "Because there is no trust on either side, buying time is their only strategy."

This week's Iranian missile tests displayed customary defiance just days after Western nations seized on Tehran's disclosure of a second uranium enrichment plant to press demands for Iran to give U.N. inspectors more information and access.

That said, Iranian leaders will try to prevent any consensus growing among major powers for tougher international sanctions over nuclear work that the West suspects is aimed at building a bomb-making capacity, not just power plants as Tehran says.

"They are willing to concede as much as is needed to avoid China and Russia joining them (the West), without compromising on enrichment," Moin said. "That has to be their red line."

Iran has been swift to assert that its newly disclosed enrichment plant, buried under a mountain near the holy city of Qom, is legal and can be inspected by the U.N. nuclear watchdog.

POST-ELECTION UNREST

Iran's hardline leadership was shaken by the post-election unrest, but normality has returned to the streets after the unprecedented mass rallies against the re-election of Mahmoud Ahmadinejad and their forcible suppression by the authorities.

Nevertheless, supporters of defeated candidates Mirhossein Mousavi and Mehdi Karoubi, who say the vote was rigged despite official denials, still stage smaller, intermittent protests.

And splits within the ruling system have yet to heal after some prominent politicians and clerics implicitly or openly criticised Supreme Leader Ayatollah Ali Khamenei's handling of the gravest domestic crisis since the 1979 Islamic revolution.

Khamenei may calculate he can regain support by defending Iran's nuclear plans against the United States and its allies.

"The nuclear program continues to speak to the national elements of Iranian identity," argued Gala Riani in a note for IHS Global Insight, a London-based analysis firm.

"It is also tightly connected with the current regime's struggle for legitimacy. Amid Iran's domestic political divides it is an ever potent and needed tool to forge domestic unity."

Iran's opposition leaders have criticised Ahmadinejad's strident nuclear rhetoric -- but not the program itself.

Alireza Nader, an analyst at the Washington-based RAND Corporation, said Iranian hardliners did not want to appear to compromise on the nuclear issue, especially as this would be seen as a sign of weakness among their core supporters.

"At the same time, they realize they must tread carefully in order not to increase further pressure on Iran, since sanctions would potentially inflame conservative businessmen who have been historically supportive of the Islamic Republic, but have been dismayed by Ahmadinejad's economic performance," he said.

Moin said hardliners might profit from new sanctions in the short run through their control of state institutions that would be used to circumvent the measures, but international isolation would put them further on the defensive in the longer term.

LACK OF CONSENSUS

China and Russia have often balked in the past at proposals to toughen sanctions broadly favored by the United States and its European allies, France, Britain and Germany. All six countries will be represented at the Geneva talks with Iran.

U.S. President Barack Obama, jolted by Iran's cold shoulder to his early overtures and upbraided for his own measured response to the post-election ferment in Iran, will look to the Geneva talks for any sign that Tehran is ready for the broader dialogue he had envisioned to calm decades of mutual rancor.

That idea had the appeal of transcending the debate over more sanctions -- which might hurt the Iranian people without making their leaders alter course -- and the troublesome options of military action or living with a nuclear-capable Iran.

For Iranian hardliners, engaging the West is problematic and their goals cut across some U.S. interests in the Middle East.

"Iran's ruling elite... would like an acknowledgement of Iran's role in the region, and would ultimately desire a dominant geopolitical position," said RAND's Nader.

Iranian leaders wanted the security and economic benefits that might flow from a rapprochement, but were wary of Western cultural and political influences.

"An opening to the West could gradually erode the foundations of the Islamic Republic, which is at its core an anti-Western revolutionary entity," he said.

Moin said the West needed a clear strategy and a joint approach with Russia and China, but questioned whether the United States could give Iran the regional recognition it craved without antagonizing its own Israeli and Arab allies.

"What we will see in these negotiations is whether there is any indication of any approach toward gradual building of confidence or not," he added.