U.S., Europeans Split at UN on How to Tighten Sanctions on Iran

By Bill Varner

May 23 (Bloomberg) -- The U.S. diverged from its European allies today over how much more pressure to exert on Iran at the United Nations after a nuclear watchdog agency said existing sanctions aren't working.

``It is clear that what we have done so far has not been enough,'' U.S. Ambassador Zalmay Khalilzad told reporters at the UN. ``The time has come to take a look at additional pressure, to ratchet up the pressure to bring about a change in the Iranian calculation.''

French and German envoys said they would support an ``incremental'' tightening of sanctions imposed on Iran in an attempt to halt uranium-enrichment and open its nuclear program to more scrutiny. ``I didn't use that word,'' Khalilzad said, while declining to speculate on what the U.S. would propose in a new measure on Iran.

The International Atomic Energy Agency said it is learning less about Iran's atomic work than before the Security Council imposed sanctions, increasing concern that Iran may be diverting uranium for military purposes.

The Vienna-based agency's ``level of knowledge of certain aspects of Iran's nuclear-related activities has deteriorated,'' read a four-page report released today. The deputy chairman of Iran's Atomic Energy Organization, Mohammad Saeedi, told the official Iranian news agency that there is no obstacle to legal inspections of nuclear facilities by the IAEA. Saeedi said Iran had suspended some of its cooperation because its rights are being ignored by the UN.

The Security Council backed resolutions in December and March that imposed penalties on Iran for its refusal to stop its nuclear development work.

`Background Music'

German Ambassador Thomas Matussek described U.S. pressure for tougher sanctions as ``background music'' that the Europeans and the other Security Council member governments should resist.

``We really are in a very, very difficult and sensitive moment of time and we have to keep working and looking at all the possibilities,'' Matussek said. ``The solution cannot come from the sanctions track.''

The Security Council voted on March 24 to ask all UN member nations to ``exercise vigilance and restraint'' in the supply, sale or transfer of weapons to Iran and to deny Iran training or financial assistance that would be used to procure weapons. The measure said nations and international lenders such as the World Bank should stop giving grants, loans or other financial aid to Iran, except for humanitarian or development purposes.

Russian and Chinese envoys, whose governments have resisted sanctions, reacted cautiously to the IAEA report, repeating their position that a negotiated settlement of the matter is needed.

Paris Talks

Chinese Deputy Ambassador Liu Zhenmin said envoys of Britain, China, France, Germany, Russia and the U.S. would meet before the end of May in Paris to discuss a diplomatic solution and ``if talks fail, what could we do in the Security Council.''

Other envoys said work in New York on a new resolution would await the June 6-8 Group of Eight summit of major economies in Germany and a meeting before the end of May between Ali Larijani, Iran's top nuclear negotiator, and European Union foreign policy chief Javier Solana.

``There is nothing much left to impose sanctions,'' Ambassador Dumisani Kumalo of South Africa, a Security Council member said. ``We have to rethink. We have to talk to them.''

`Atmosphere Has Changed'

Matussek said while the U.S. and the European governments don't fully agree on tactics, talks on a new resolution should be easier with Khalilzad leading the U.S. mission. Khalilzad is a Muslim born in Afghanistan who has served as U.S. ambassador to Afghanistan and Iran.

``With the new ambassador here the atmosphere has changed in the sense that it makes it much easier to think of solutions together, to work as a team,'' Matussek said. ``He is a team player.''

Khalilzad's predecessor as U.S. envoy, John Bolton, was regarded by many diplomats as having a divisive impact on negotiations.

Iran suspended inspector access to military and research sites last year after the IAEA sent the country's case to the Security Council. The IAEA report found that Iran continues to enrich uranium, ignoring a 60-day deadline to stop issued by the Security Council on March 24. Iran has fed uranium gas into more than 1,300 centrifuges at its fortified underground enrichment plant in Natanz, according to the IAEA.

Centrifuges spin at high speeds, separating uranium isotopes that can be used to fuel nuclear power plants or arm an atomic weapon. Iran says it wants the uranium to generate electricity. The U.S. suspects Iran wants to build a bomb.

To contact the reporter on this story: Bill Varner in United Nations at wvarner@bloomberg.net .