Iran holds atomic fete with UN deadline looming

TEHRAN (Reuters) - Iran marks the 28th anniversary of its revolution on Sunday seeking to show a nation united over its nuclear policy, but Western pressure and cautious voices at home dampened prospects for a big statement on atomic progress.

Hundreds of thousands will march to Azadi (Freedom) square to hear a speech by President Mahmoud Ahmadinejad around 10 a.m. (0630 GMT), who has said Iran would celebrate its nuclear achievements on the anniversary of the 1979 Islamic revolution.

It prompted talk that Iran might say it had begun installing 3,000 centrifuges at its Natanz uranium enrichment facility, defying a December U.N. sanctions resolution which gave Tehran until February 21 to suspend enrichment or face more measures.

Iran already runs two cascades of 164 centrifuges at Natanz underground facility, but plans to install thousands of centrifuges and start "industrial-scale" enrichment.

However, some officials have suggested that Tehran had no intention to take provocative steps such as announcing an expansion of atomic work to block a political solution to resolve the dispute.

Public buildings, mosques and streets are being covered with flags, lights and portraits of the late founder of Iran's Islamic revolution Ayatollah Ruhollah Khomeini and his successor Supreme leader Ayatollah Ali Khamenei.

On January 16, 1979, Shah Mohammad Reza Pahlavi was forced into exile after mounting discontent with his authoritarian rule. Khomeini returned to Tehran from Paris after 15 years of exile on February 1. Ten days later the shah's last premier resigned after street fighting and Khomeini took power.

MUNICH TALKS

Iran's chief nuclear negotiator Ali Larijani said in Munich on Saturday that Tehran believed the nuclear row can be resolved by negotiations. Larijani is expected to meet EU officials in Munich on Sunday.

"We believe the Iranian nuclear dossier is resolvable by negotiation," Larijani told Reuters on the sidelines of a security conference in Munich.

Some Western diplomats said on Saturday that a small group of European nations were weighing a compromise proposal they plan to put to Iran in the hope that it could end the standoff. The proposal is that Iran would be permitted to keep its uranium enrichment infrastructure of several hundred centrifuges.

Iran could run the machines but would not feed any processed uranium hexafluoride (UF6) into the machines while negotiating a package of incentives with six world powers.

Concerned that Iran would gain nuclear skills merely by vacuum-testing centrifuges, neither the United States nor Britain, would find the idea very attractive, some Western diplomats said.

Iranian officials have urged people to take part in the rally "to display their support to Iran's peaceful nuclear programme", which the West fears is a cover to pursue atomic weapons. Iran insists it only wants to make fuel for atomic power plants.

After almost three decades, many Iranians, especially the young, have lost interest in the revolution. But most remain proud of their country's nuclear programme.