ElBaradei: Iran blocking of atom plan disappointing

VIENNA (Reuters) - The U.N. nuclear watchdog chief Thursday criticized Iran's blockage of a plan to divest it of possible nuclear bomb material as "disappointing."

Under the deal drafted by Mohamed ElBaradei, Iran would send 75 percent of its low-enriched uranium (LEU) to Russia and France. There it would be made into special fuel for a Tehran reactor making medical materials, which will run out next year.

But the International Atomic Energy Agency (IAEA) chief's proposal, aimed at dispelling fears Iran could secretly derive bomb material from LEU, has foundered over Iran's insistence on giving up no LEU until the reactor fuel reaches its soil.

This would defeat the goal of six world powers -- Britain, France, the United States, Germany, Russia and China -- of cutting Iran's LEU reserves to less than the quantity needed to fashion a nuclear warhead, if refined to high purity.

ElBaradei rejected Iran's assertions the deal lacks guarantees it will get the fuel in the end, a stance Western powers regard as stalling and a tacit admission its LEU will not be used for electricity generation, as Tehran insists.

"In view of the degree of mutual mistrust, it has extensive built-in guarantees, consisting of the IAEA taking custody of the (LEU) until it returned to Iran in the form of fuel," he told a meeting of the agency's 35-nation Board of Governors, his last before he retires Monday after 12 years in office.

ElBaradei noted that as an alternative, he had proposed transferring the LEU to a neutral third country such as Turkey, "which has the confidence of all parties," and remain there under IAEA supervision until Iran gets the reactor fuel.

"I am disappointed that Iran so far has not agreed to the original proposal or alternative modalities, both of which I believe are balanced and fair and would greatly alleviate the concerns relating to Iran's nuclear program." ElBaradei told Reuters in a rare interview Wednesday that Iran's demand to dilute the fuel pact was unacceptable because it could mean Tehran retaining enough enriched uranium for use in a nuclear weapon.

"They are ready to put material under IAEA control on an (Iranian) island in the Persian Gulf. But the whole idea as I explained to them, to defuse this crisis, is to take the material out of Iran," said ElBaradei.

"I do not think this will work as far as the West is concerned."

He welcomed U.S. President Barack Obama's readiness to wait until the end of the year for Iran to give ground before considering further sanctions, but said Tehran should not waste time.

"Unless Obama sees a (workable) response from Iran, he will not be able to sustain his initiative (for detente with Iran)."

(Editing by Andrew Roche)