Rice swipes at IAEA, urges bold action on Iran

(adds ElBaradei no comment, Vienna diplomatic comment)

SHANNON, Ireland, Sept 19 (Reuters) - U.S. Secretary of State Condoleezza Rice scolded the U.N.'s atomic watchdog agency on Wednesday over its Iran strategy and called for diplomacy with "teeth" to end Tehran's nuclear plans.

While repeating the U.S. stand that "all options" remained on the table -- a reference to military action against Tehran -- Rice sought to ease fresh concerns over talk of war.

"The diplomatic track can work but it has to work both with a set of incentives and a set of teeth," she said.

The United States has criticised a deal International Atomic Energy Agency (IAEA) chief Mohamed ElBaradei has made with Iran to answer long-standing questions about its nuclear activities.

Washington and its European allies argue the IAEA moves divert attention from U.N. Security Council demands that Iran suspend uranium enrichment and grant broader inspections.

Rice, who in June accused ElBaradei of "muddying the message" to Iran, voiced strong irritation with the IAEA chief, without naming him.

"The IAEA is not in the business of diplomacy. The IAEA is a technical agency that has a board of governors of which the United States is a member," Rice told reporters travelling with her to Israel and the Palestinian Territories.

"It is not up to anybody to diminish or to begin to cut back on the obligations that the Iranians have been ordered to take."

At IAEA headquarters in Vienna, ElBaradei rebuffed requests for comment on Rice's remarks. A senior diplomat close to the IAEA said "we should not make a big deal" out of the matter.

"The IAEA is only doing now what the U.N. Security Council asked us to do -- clear up outstanding questions. This is an issue of appreciating the agency's efforts to start to get Iran to build confidence. That's the IAEA's job."


Tehran says its nuclear programme is for civilian power generation while Washington and others say it is geared towards building a bomb. Western powers point to Iran's past secrecy over nuclear research as cause for concern.

The Security Council has passed two sanctions resolutions against Iran. Washington is pushing for a third, harsher round of measures, which China and Russia oppose, arguing the IAEA should be given more time to secure Iranian transparency before either further sanctions or military action are considered.

ElBaradei has urged Western powers to be patient and chided talk of future military action by the United States and others against Tehran, telling nations opposed to his efforts to learn from the U.S.-led invasion of Iraq in 2003, which was justified based on suspicion of mass-destruction weapons never found.

France's Foreign Minister Bernard Kouchner raised the spectre of war with Iran this week but has since played down his comments, saying they were meant as a warning against military action and not to incite it.

Rice declined to comment on Kouchner's statements but said: "The key here is that we are committed to a diplomatic track but the president has not taken any of his options off the table."

Aside from U.N. action, The United States and its European allies are considering a range of unilateral steps against Iran. U.S. officials say Washington may soon sanction a unit of Iran's Revolutionary Guard Corps, among other punitive steps.

Political directors from the major powers are to meet in Washington on Friday to discuss what could be included in a third U.N. resolution, said Rice, without elaborating. (additional reporting by Mark Heinrich in Vienna)