Obama says world moving quickly on Iran sanctions

WASHINGTON/TEHRAN (Reuters) - President Barack Obama said on Tuesday the international community was moving "fairly quickly" toward imposing broader sanctions on Iran, as the Islamic Republic defiantly expanded its nuclear program.

Obama said Iran's refusal to accept a U.N.-brokered atomic fuel swap deal suggested it was intent on trying to build nuclear weapons, despite its insistence that its nuclear program was only for the peaceful generation of electricity.

Obama came into office vowing to break with the Bush administration's policy of seeking to isolate Iran. But he has taken a tougher stance since disputed elections there last June and the passing of his December deadline for Tehran to accept the deal proposed by the International Atomic Energy Agency (IAEA), the U.N. nuclear watchdog.

Iran defied international pressure by announcing over the weekend that it would enrich uranium to 20 percent purity for a reactor making isotopes for cancer patients. Iran on Tuesday announced the work had begun.

Obama said the door was still open for Iran to enter into negotiations with major powers on its nuclear program. But he made clear the United States was now focused on sanctions.

"What we are going to be working on over the next several weeks is developing a significant regime of sanctions that will indicate to them how isolated they are from the international community as a whole," Obama told reporters in Washington.

"It's moving along fairly quickly," Obama said when asked about how quickly the sanctions effort was proceeding.

The big powers already have stepped up discussions on possible next moves. Russia sent its strongest signal yet that it could back a fourth set of U.N. sanctions over Iran's nuclear program.

Defense Secretary Robert Gates told Fox News: "I think it's going to take some period of time -- I would say weeks, not months -- to see if we can't get another U.N. Security Council resolution."

Obama said any new Security Council resolution would be part of a broader sanctions effort.

"We are going to be looking at a variety of ways in which countries indicate to Iran that their approach is unacceptable," he said.

Possible targets for any new sanctions include Iran's central bank, the Revolutionary Guards, who Western powers say are key to Iran's nuclear program, shipping firms and its energy sector, Western diplomats say.

MEDICAL ISOTOPES

Russia, which in the past has urged talks rather than sanctions, said Iran's new enrichment drive was a clear breach of U.N. resolutions and that Western concerns over Iran's true nuclear intentions were well-founded.

"Political-diplomatic methods are important for a resolution, but there is a limit to everything," said Nikolai Patrushev, powerful secretary of the presidential Security Council, according to Interfax news agency.

Among the big powers only China, which can block any U.N. sanctions, has remained unswervingly opposed to punishing Iran. On Tuesday it urged increased diplomatic efforts, calling for all sides to work toward a deal on the fuel exchange plan.

"How China operates at the Security Council as we pursue sanctions is something that we're going to have to see," Obama said, while praising Russia for its "forward-leaning" approach to Iran.

Iranian State television quoted Iranian nuclear agency chief Ali Akbar Salehi as saying the process of producing higher-enriched uranium at the Natanz facility had begun under the supervision of the IAEA.

It showed footage of him giving the order via computer and scientists and officials around him shouting "Allahu Akbar" (God is greatest).

The enrichment followed a failure to agree on a swap with major powers, under which Iran would have sent most of its low-enriched uranium abroad in return for 20-percent-pure fuel rods for the reactor producing medical isotopes.

U.S. officials said this week Washington was prepared to help Iran obtain medical isotopes from third-country sources, calling it a "faster, cheaper and more responsible alternative" to the IAEA proposal than the Iranian government's.

Iran currently enriches uranium to 3.5 percent purity.

Salehi said Iran had set up a chain of 164 centrifuges to refine the uranium to 20 percent purity. Production capacity was 3 to 5 kg a month, above the Tehran reactor's needs of 1.5 kg, ISNA news agency reported.

Centrifuges that had enriched to 3.5 percent would need to be recalibrated for 20 percent production -- preparatory work that would normally take a month or two. A diplomat close to the IAEA said inspectors had noticed no such preparations before Monday.

Although a nuclear bomb requires about 90 percent purity, getting to 20 percent is a big step because low-level enrichment is the most time-consuming and difficult stage of the process.

(Additional reporting by Parisa Hafezi and Hossein Jaseb in Tehran, Chris Buckley in Beijing and Steve Holland in Washington; Editing by Will Dunham)