UN chief to Iran ''lift cloud of uncertainty''

HANOI, May 24 (Reuters) Iran should ''lift the cloud of uncertainty'' over its nuclear programme and the world should show it does not oppose Tehran using nuclear power for peaceful purposes, UN Secretary-General Kofi Annan said today.

Annan told reporters on a visit to Vietnam that he had appealed to Iran ''not to reject anything out of hand'' as world powers met in London to discuss a package of incentives and threats drafted by European countries aimed at defusing a crisis over the Islamic Republic's nuclear plans.

''It is important that Iran assures the world that its intentions are peaceful and works with the IAEA (the UN's International Atomic Energy Agency) to lift the cloud of uncertainty around this nuclear project,'' Annan said.

''It is also important for us to assure Iran that no one is opposed to it having peaceful use (of nuclear power),'' said the UN chief, who spent the day meeting top Vietnamese leaders and United Nations staff in the capital Hanoi.

In London, senior officials from UN Security Council permanent members China, Russia, the United States, France and Britain, plus Germany, will try to narrow divisions over how to proceed to persuade Tehran to halt its uranium enrichment work.

The package they are trying to hammer out is likely to include an offer of a light-water reactor and an assured supply from abroad of fuel for civilian atomic plants so Iran would not have to enrich uranium itself.

Enriched uranium can be used as a nuclear fuel, but is also a key component of atomic weapons.

The package will also warn of possible sanctions if Iran, the world's fourth-biggest oil producer, refuses the offer.

Top Iranian officials have asked intermediaries, including Annan, IAEA chief Mohamed ElBaradei, Indonesia and Kuwait to make clear to Washington it wants direct talks on its nuclear programme, the Washington Post reported today.

Washington and some western nations suspect Iran's nuclear programme is a cover for efforts to develop an atomic bomb.

But Iran says it is developing nuclear technology for civilian power generation.

Annan arrived in Hanoi yesterday night as part of an Asian tour.

He leaves Vietnam tomorrow.

REUTERS SHR RK1835