Iran progress partial; new sanctions possible

VIENNA, Nov 22 (Reuters) European powers said today Iran had not done enough to regain trust in its atomic work and the UN should now consider tougher sanctions.

''A wait-and-see approach is not an option,'' Britain, France and Germany told governors of the International Atomic Energy Agency after its chief said Iran appeared on course to clearing up questions about its nuclear history by the end of the year.

Mohamed ElBaradei had also reiterated that the IAEA's knowledge of current Iranian activity was shrinking due to strict Iranian curbs on UN inspector movements and Iran was expanding uranium enrichment despite UN calls for a halt.

The statement by the ''EU-3'' said both matters were ''unacceptable ... We are interested at least as much in the present and future (of Iran's programme) as the past.

The West fears Iran is secretly trying to build atom bombs.

Iran says it only wants electricity from uranium enrichment.

''We recognise Iran has taken some steps in the right direction but we are disappointed that cooperation is of a partial and reactive nature,'' the EU-3 said, mirroring the US position. ''So, all in all, the results are not encouraging.'' ''Therefore we must draw conclusions at the (UN) Security Council,'' they said, meaning consideration of tougher sanctions in talks with main ally the United States as well as Russia and China. They gave no time frame.

Iran's top nuclear negotiator Saeed Jalili said today he would meet EU foreign policy chief Javier Solana on Nov. 30.

If Solana concludes -- as highly likely -- Iran remains adamant against suspension, sanctions steps could follow.

Russia and China were likely to cast the IAEA's report in a more positive light and warn against disrupting the plan for Iran to come clean in stages about its nuclear development.

Both have blocked tougher UN Security Council sanctions, calling them counterproductive, but have lately pressed Iran harder to be open and halt enrichment.

Solana said today creating international nuclear fuel production sites under multinational supervision could ease the standoff. ''Only a multilateral solution can make it possible to end this crisis,'' he told a conference on European policy.

But Iran has ruled out such a solution if it has to renounce enrichment at home in the bargain.

MEANING OF IAEA FINDINGS IN DISPUTE ElBaradei summarised an IAEA report on Iran to the 35-nation board, where differences simmered over whether Iran's improved transparency was cause for new hope or further scepticism.

His remarks to the board appeared carefully balanced to incorporate Western concerns while suggesting the Iran-IAEA process deserves patience to help bring it to fruition.

Other Western board members spotlighted Iran's defiant enrichment campaign overriding its vow to be reveal the past.

Developing nations, by contrast, highlighted Iran's improved openness and warned against ''political interference'', an allusion to Western and Israeli criticism they fear could reduce Iran's will to cooperate and lead to dangerous conflict.

ElBaradei said the plan was on track -- after some Western powers said they perceived Iran dragging its heels.

''There has been good progress,'' he said, in getting Iran to own up after years of stonewalling about secret 1980s and '90s efforts to acquire centrifuge enrichment technology from nuclear smugglers. But he urged faster cooperation from Tehran.

That call reflected the fact that the next issues to resolve will be more difficult due to possible military dimensions.

The IAEA wants credible explanations for traces of highly enriched -- or bomb-grade -- uranium that inspectors found at research sites, and intelligence on links between uranium processing, explosives tests and a missile warhead design.

Ali Asghar Soltanieh, Iran's envoy to the IAEA, told reporters the agency's report showed Iran had been truthful about its nuclear course and warned against further sanctions.

''We will continue the mood of cooperation provided that ...

peace-loving countries prevent the United States or others from making noise and creating problems and jeopardising this constructive approach by any measure in the UN Security Council,'' he said.

REUTERS RSA RN2304