U.S. open to Iran nuclear fuel deal despite doubts

Iranian President Mahmoud Ahmadinejad visits the Natanz nuclear enrichment facility, 350 km (217 miles) south of Tehran, April 8, 2008.

WASHINGTON (Reuters) - The United States said on Monday it was still willing to discuss a nuclear fuel swap deal with Iran, but only if Tehran takes clear steps to address international concerns about its nuclear program.

State Department spokesman P.J. Crowley said the deal, proposed by the International Atomic Energy Agency (IAEA) last October as a means of heading off confrontation over Iran's nuclear ambitions, was still on the table but signaled that Washington had little hope Tehran would follow through.

"We are still interested in pursuing that offer if Iran is interested. It would need to be updated because over the course of the last seven months Iran has had its centrifuges operating and one would presume has increased the amount of fuel at its disposal," Crowley told a news briefing.

"If Iran wants to pursue this what it needs to do is actually indicate that formally to the IAEA. That is something that Iran has never done," Crowley said.

"What Iran has yet to do is come to the IAEA, sit down and provide a meaningful response to what was put on the table last fall," he said.

A senior Iranian official said on Monday that Iran was ready to start work on a new uranium enrichment plant, further defying Western pressure to curb its sensitive nuclear work.

The White House said on Monday that Iran's rhetoric on its nuclear program does not always match its capability but underscored that it took seriously evidence that Iran was not living up to its international obligations.

"The rhetoric of Iran and their nuclear program does not always meet the reality of what they're capable of," White House spokesman Robert Gibbs said.

SANCTIONS LOOM

Although Iran initially indicated it would discuss the proposed fuel deal, the talks later collapsed -- persuading the United States and its western allies to begin pushing for a fourth round of U.N. sanctions on Iran, which they fear is attempting to develop nuclear weapons.

President Barack Obama has said he wants new sanctions in place soon, and discussions on the scope of the proposed new measures are under way among permanent members of the U.N. Security Council, including Russia and China.

Despite this, the foreign minister of Turkey -- a U.S. ally which also has good ties with Tehran -- said this month he believed it was still possible to revive the fuel deal, under which Iran would send much of its low enriched uranium, or LEU, for processing abroad.

Ahmet Davutoglu told reporters he had discerned a change in the Iranian stance over the past several months during which he said he visited Tehran about a half-dozen times.

Turkey and Brazil now hold non-permanent seats on the Security Council and both have said they believe diplomacy should be given more time with Iran, which insists its nuclear program is purely for peaceful purposes.

Crowley said the United States would not be interested in any arrangement which simply gave Iran more time without demanding meaningful changes.

"Iran over the course of months has offered a number of variations (to the fuel swap deal), none of which address the core international concern about the trajectory of Iran's nuclear program," Crowley said.

"If Iran is willing to have an exchange that not only meets legitimate Iranian needs but also addresses core international concerns about Iran's nuclear program, we can have that discussion. But unfortunately Iran has not come forward with any kind of meaningful follow-up."

Under the original proposal, Iran would export uranium fuel stocks to be enriched abroad and then repatriated under tight international safeguards to power a Tehran nuclear research reactor that produces medical isotopes.

Turkey's Davutoglu, who is due to return to Iran in coming weeks, said Tehran was "more flexible" on earlier demands for a simultaneous exchange inside Iran of its LEU for the research reactor fuel.

(Additional reporting by Arshad Mohammed and Toby Zakaria, editing by Cynthia Osterman)