West queries IAEA aid for Syria during atomic probe

VIENNA (Reuters) - Western powers have questioned an International Atomic Energy Agency offer to help Syria look into building a nuclear power plant while it is under investigation for alleged covert atomic activity, diplomats said on Friday.

But they said that whether the United States and close allies act to bar the "technical cooperation" project at an IAEA governors meeting in two weeks -- a rare and politically divisive step -- will depend on the findings of the agency's first investigative report on Syria due next week.

Diplomats tracking the U.N. nuclear watchdog said on Monday that traces of uranium turned up in some test samples taken by IAEA inspectors from a Syrian site Washington says was a nascent atomic reactor before it was bombed by Israel in 2007.

The IAEA declined comment pending the report.

Syria has said the site was a disused military building and that U.S. intelligence driving the IAEA investigation is fabricated. It suggested that the uranium particles came with munitions Israel dropped on the site.

Some diplomats and analysts said the traces were more likely to have come from uranium that was at some stage of processing for fuel, but the origin remained unclear.

The IAEA was expected to caution that the findings warranted further investigation before conclusions could be drawn.

Vienna diplomats, who asked for anonymity, said the mere fact Syria was being probed over nuclear proliferation concerns meant that approving the nuclear power plant study now could send the wrong message.

A restricted IAEA document obtained by Reuters listed a proposal for a "technical and economic feasibility study and site selection" for a power station at a cost of $350,000 from 2009 through 2011.

OTHER PROJECTS NOT IN DISPUTE

This was one of eight draft technical cooperation (TC) projects in Syria of the sort the IAEA does in many member states seeking to develop peaceful uses of nuclear energy.

TC plans come up for ratification by the IAEA's 35-nation board of governors every November. Such projects must be approved by consensus.

The other seven projects listed for Syria had innocuous medical, farming or safety applications and diplomats said these would face no objections.

The United States, Britain and France -- among the biggest contributors of funding for IAEA aid projects -- aired the issue of power plant study in a meeting of Western diplomatic missions accredited to the IAEA, diplomats said.

"Eyebrows were raised and questions were posed about the timeline for this power plant study, whether it's premature before other issues are resolved," said one European diplomat.

"There was some question as to whether it would be appropriate first to assess Syria's energy needs," said another.

But diplomats said many delegations on the global governing body were loath to "politicize" IAEA technical aid without urgent reasons and Western powers were awaiting the IAEA report before deciding a course of action.

In a rare step, the board stripped Iran of some TC projects two years ago. But, unlike Syria, Iran had already been found by the IAEA to have hidden proliferation-sensitive activity and had come under U.N. sanctions which prohibited such IAEA aid.