Iran raises nuclear stakes before big powers meet

By Fredrik Dahl and Parisa Hafezi

TEHRAN (Reuters) - Iran says it plans proposals to help end a row over its nuclear ambitions but at the same time it is raising the stakes before world powers meet by expanding work the West fears could produce bombs.

The five permanent U.N. Security Council members -- the United States, Russia, China, France and Britain -- and Germany are expected to discuss sweetening an incentives package offered in 2006 when their officials meet in Shanghai on Wednesday.

Iranian officials have repeatedly ruled out halting the nuclear program in return for trade and other benefits.

"I don't think it is a bargain Iran will accept," one Iranian analyst who spoke on condition of anonymity said. "The enrichment program is the red line at the moment."

President Mahmoud Ahmadinejad last week further defied U.N. demands by announcing the start of a major expansion of Iran's uranium enrichment capacity. Refined uranium can be used as fuel for power plants and also provide material for weapons.

But Foreign Minister Manouchehr Mottaki said on Sunday that Iran would soon unveil proposals with "a new orientation" to help end international and other problems. He gave no details.

Iran, the world's fourth-largest crude producer, says it plans to build a network of nuclear power plants to meet soaring electricity demand and help it export more of its oil and gas.

It has been hit by three rounds of limited U.N. sanctions over its refusal to stop enrichment, but analysts say its oil wealth is helping it to cushion the impact.