(Reuters) - Iran is sending mixed signals on its readiness to negotiate with the West about its nuclear program, offering unconditional talks on a possible fuel swap but setting terms for any broader discussions with its foes.
The eight-year international dispute over Iran’s atomic activities has the potential to set off a regional arms race and spark a conflict in the Middle East, making it arguably the most pressing nuclear proliferation issue facing major powers.
But Western and other diplomats grappling with sensitive nuclear matters also face other issues, including North Korea’s nuclear arms program and suspicions about Syria, as well as Arab anger over Israel’s presumed atomic arsenal.
Here is an outline of possible nuclear-related risks and diplomatic challenges:
IRAN‘S NUCLEAR PROGRAMME
Big powers hope the imposition since June of new U.N., U.S. and European sanctions on Tehran will persuade the Islamic Republic to enter negotiations on its nuclear work, which the West suspects is aimed at developing bombs.
Iran denies any atomic arms ambitions and dismisses the impact of sanctions. It says it is willing to resume talks on a proposal for it to send low-enriched uranium abroad and get higher-grade fuel for a medical research reactor in return.
Tehran has repeatedly defied international demands to halt all its uranium enrichment activities. Western diplomats stress that even if a deal was struck on a fuel exchange, it would not resolve wider concerns about Iran’s nuclear plans.
Advancing itself toward the weapons-grade threshold, Iran began enriching uranium to a level of 20 percent fissile purity in February. Tehran said that it was forced to take this course to secure fuel for the Tehran facility making medical isotopes after failing to agree terms for a swap with three world powers.
Iran now says it would be ready to suspend this higher-grade activity if it obtains the 20 percent fuel from abroad. But it remains unclear if this could pave the way for a compromise with Western powers deeply suspicious of Iran’s intentions.
Western diplomats see a possible fuel swap accord -- in talks involving the United States, Russia and France -- as a confidence-building step for wider discussions they hope will lead to Iran suspending its uranium enrichment program.
Tehran has ruled out halting enrichment, which can be used to fuel power plants or produce material for the core of an atomic bomb if refined to the 90 percent level.
“It (a fuel swap) is a step that needs to be resolved before they can get to the core issue, which is Iran’s enrichment activities,” said analyst Gala Riani at IHS Global Insight.
President Mahmoud Ahmadinejad has raised conditions for further discussions, for example saying the parties involved must first express a view on Israel’s alleged nuclear arsenal.
Supreme Leader Ayatollah Ali Khamenei, Iran’s top authority, said in August that Tehran would not conduct talks with the United States unless sanctions and military threats were lifted.
What to watch:
-- Any resumption of talks on the fuel swap plan; statements on the possibility of broader discussions
-- Signs of Iran escalating enrichment activity, including any work on building new enrichment plants
Arab countries backed by Iran will try to pile more pressure on Israel over its presumed nuclear arsenal at meetings of the governing board and general assembly of the Vienna-based U.N. International Atomic Energy Agency (IAEA) beginning on September 13.
A year ago, they won narrow backing for a non-binding resolution, opposed by the United States and its allies, that called on Israel to join the nuclear Non-Proliferation Treaty (NPT) and put its atomic installations under IAEA inspection.
Vienna-based diplomats say these countries may table a similar text this year, despite opposition from Washington.
The 2009 resolution urged IAEA Director-General Yukiya Amano to prepare a report for the next assembly meeting on how to implement the measure. One diplomat in Vienna said he expected Amano’s report to be ”absolutely neutral.
Israel has conditioned its joining the NPT on comprehensive Middle East peace and says Iran is the region’s real proliferation risk. The Jewish state has condemned the Arab-led push as the product of countries which question its existence. Israel has never confirmed or denied having atom bombs under a policy of ambiguity to deter numerically superior adversaries.
Western countries have warned that zeroing in on Israel could inhibit broader initiatives aimed at banning weapons of mass destruction throughout the Middle East.
The United States alarmed Israel in May by backing an Egyptian initiative for a regional conference in 2012 on a Middle East free of such weaponry. The Obama administration has since pledged to keep the Jewish state from being ”singled out.
What to watch:
-- Will Arab states win support for new IAEA resolution?
-- Israel’s reaction; statements on 2012 conference
North Korea, which left the global anti-nuclear arms pact in 2003 and expelled IAEA inspectors, said in August it is committed to denuclearizing the peninsula and resuming international talks on ending its nuclear arms program.
But analysts are skeptical about the chances of substantive negotiations any time soon.
Tensions have risen on the Korean peninsula since the March torpedoing of a South Korean navy ship, blamed by Seoul on the North. Pyongyang denies sinking the ship.
Six-way nuclear talks involving the two Koreas, the United States, Japan, Russia and China have been in limbo since 2008 when North Korea said they were finished.
South Korea and the United States have said that resuming the talks will be impossible until the ship dispute is settled.
The North conducted a nuclear test in 2009, its second since 2006. But the reclusive state has not shown it has a working nuclear bomb.
What to watch:
-- Any movement toward restarting nuclear talks
-- North Korea’s development of uranium enrichment, potentially giving it another route to make nuclear bombs besides weapons-grade plutonium made at its Yongbyon complex
China has plans to build two more reactors at Pakistan’s Chashma nuclear power complex, a deal that has prompted questions from India, the United States and others worried it could erode non-proliferation rules.
Beijing believes it is important to back Pakistan to counter Indian regional dominance. It is also wary of the U.S. sway in South Asia, and Washington signed a nuclear energy deal with India in 2008 that China and other countries found questionable.
China says the safeguards in place at Chashma ensure its role is entirely peaceful. Critics say that Pakistan’s domestic instability and its past role spreading nuclear arms technology demand that Chashma come under firmer international scrutiny.
Pakistan and India have nuclear weapons, and both refuse to join the NPT, which would oblige them to scrap those arms.
What to watch:
-- More details on China’s nuclear deal with Pakistan
-- Discussions on the issue within the Nuclear Suppliers Group, a secretive 46-nation body that seeks to ensure nuclear exports are not diverted to non-peaceful purposes
An IAEA report said in May Syria was still blocking access to a desert site where secret nuclear work may have taken place.
U.S. intelligence reports said the Dair Alzour site, bombed to rubble by Israel in 2007, had been a North Korean-designed nuclear reactor under construction, geared to produce plutonium for atomic bombs.
Syria allowed IAEA inspectors to examine the site in 2008 but has not allowed the agency to revisit it since then.
Glyn Davies, the U.S. envoy to the IAEA, said in August it should consider pressing for a mandatory special inspection in Syria to resolve the allegations of covert atomic activity.
Special inspections give IAEA experts the authority to look anywhere at short notice in a member state, beyond declared nuclear facilities.
Any such move may anger Damascus, whose relations with Washington improved after Barack Obama came to power in 2009.
What to watch:
-- Any new revelations on the nature of Syria’s activities
-- Possible diplomatic U.S. action at the IAEA
Accounts of suspected nuclear plans surfaced last year and a Norwegian-based exile group said in June that Myanmar was trying to develop a secret nuclear program with the intention of making an atomic bomb.
The IAEA said at the time it was looking into the report. Myanmar is a member of both the NPT and the U.N. agency.
Myanmar said it has no ambition to become a nuclear power and that reports that it was developing a nuclear program with North Korean help were groundless.
What to watch:
-- Any new allegations of secret nuclear aims or activities
Additional reporting by Sylvia Westall; Editing by Mark Heinrich