BRUSSELS, May 12: A package of incentives for Iran to defuse suspicions it seeks atomic bombs will insist it shelve uranium enrichment work, according to an EU draft leaked on Friday, even though Tehran has ruled this out in advance.

As EU officials were shaping a ‘carrots and sticks’ offer for Iran to be presented on Monday, questions about Tehran’s atomic aims increased with word from diplomats that traces of near bomb-grade uranium had been found on equipment in Iran.

Iran signalled undiminished confidence in a lack of big power resolve against its atomic work with President Mahmoud Ahmadinejad calling Western pressure ‘psychological propaganda’ and the US-mooted, last-resort option of war ‘unlikely’.

The United States and its western allies suspect Iran’s professed ambition to purify uranium to generate electricity is a smokescreen for an atomic bomb programme, a concern stoked by Tehran’s 18-year concealment of sensitive enrichment research.

But Russian and Chinese resistance to any UN Security Council resolution that could spawn sanctions on Iran has forced western powers to first try a package of incentives and penalties for Tehran.

EU diplomats hope to have the offer ready in time for a May 19 meeting in London of the five veto-holding big powers on the Security Council plus Germany.

“(The EU) calls on Iranian authorities to cooperate fully with the (UN nuclear watchdog) IAEA, suspend all enrichment -related and reprocessing activities, including research and development,” said a draft declaration destined for an EU foreign ministers’ meeting on Monday.

But Tehran said on Thursday its nuclear research and development programme, in which it demonstrated an ability last month to produce low-enriched uranium for power plants for the first time, would not be traded for any Western sweeteners.

The draft statement gave no details of that package but said: “The EU would be prepared to support Iran’s development of a safe, sustainable and proliferation-proof civilian nuclear programme if international concerns were fully addressed and confidence in Iran’s intentions established.”

WEST’S BOTTOM LINE: Implicit in that formula is that Iran would import enriched uranium rather than produce its own, thus minimising the risk it could produce highly-enriched bomb-grade fuel.

The EU package would expand on an offer made last August which Iran rejected. The new version is likely to contain a mix of assistance to Iran’s civil nuclear programme, freer trade with Europe and political incentives, diplomats say.

IAEA chief Mohamed ElBaradei warned efforts to resolve the crisis diplomatically may prove in vain unless Washington addressed what he said were Iran’s legitimate security concerns.

“When you are talking about security, there is only one country that can talk to Iran and that is the U.S., it’s not Europe,” he said at a debate in the Netherlands.

Mr ElBaradei said Iran still had to clarify a number of issues but that the IAEA had not seen any ‘significant’ nuclear material being undeclared or diverted into weapons.

“We haven’t seen a clear and present danger. We haven’t seen an imminent threat,” he said, adding he agreed with U.S. estimates that Iran was five to 10 years from a nuclear bomb. —Reuters

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