Iran nuclear jousting overshadows Asian meeting

SHANGHAI, June 15 (Reuters) A Central Asian summit on regional cooperation opened in China today but the presence of Iranian President Mahmoud Ahmadinejad and his nuclear ambitions threatened to overshadow the meeting.

Leaders of the six Shanghai Cooperation Organisation (SCO) members -- China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan -- assembled in China's financial capital for a group photograph and then closed-door discussions ahead of public speeches marking the fifth anniversary of the organisation.

China says the organisation is intended to promote stability and development in the largely Muslim region to its west, and it claims the group is a bulwark against terrorism and religious extremism.

''The SCO member states have huge potential in economic, energy and transportation cooperation,'' the official China Daily said in a commentary today, adding that talks in Shanghai would ''focus on strengthening anti-terror measures''.

But U S officials have suggested China and Russia want to use the group to counter U S influence -- and also keep on eye on their respective activities -- in Central Asia. And human rights groups have said the group's authoritarian member states use the threat of terrorism to repress peaceful opposition.

Iran is an observer at the meeting, along with India, Pakistan and Mongolia. Afganistan's President Karzai is attending as a guest.

FIREWORKS Chinese television showed the Iranian leader chatting with Chinese President Hu Jintao and then Russian President Vladimir Putin while the group's leaders watched fireworks from a river boat last night.

But the world is waiting while Ahmadinejad considers a package of incentives and penalties offered by the five permanent members of the U N Security Council and Germany, aimed at persuading it to abandon uranium enrichment.

If Iran rejects the package, the Western powers may push for U N-backed sanctions, a step China and Russia have resisted.

Hu is to meet Ahmadinejad tomorrow and Russian President Vladimir Putin may also meet the Iranian leader while in Shanghai.

Ahmadinejad will also give a news conference in Shanghai tomorrow.

China yesterday urged a positive response to the nuclear offer, but chided reporters for giving so much attention to Iran. ''The attention of all of you might be too much focused on the Iran nuclear issue,'' Foreign Ministry spokesman Liu Jianchao told reporters.

Some in the United States and Europe are starting to worry as much about the timing of Iran's reply as its content.

In Washington, a Western diplomat said the main concern was that Iran would string out a response until an International Atomic Energy Agency (IAEA) meeting in September.

During this time they could edge closer to mastering the ability to enrich nuclear fuel, a step Western powers have said would bring Tehran closer to being able to make atomic weapons.

''You can't put the toothpaste back in the bb after it's out,'' said the diplomat, who spoke on condition of anonymity.

''It looks like we will not even get an answer by the July G8 summit and then we will enter the doldrums of summer before the IAEA September meeting,'' he said.

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