UN watchdog delays ruling on disputed Iran atom aid

VIENNA, Nov 21 (Reuters) A divided UN nuclear watchdog has put off until Thursday ruling on Iran's bid for aid for a project the West fears could yield bomb-grade plutonium, but is still likely to block such assistance, diplomats said.

They said Western and developing nations had failed to hammer out a compromise deal on Iran's request at a meeting of the International Atomic Energy Agency's technical affairs committee, meeting ahead of an IAEA governing board session.

''Efforts to reach consensus are stuck. So they have decided to send the Iran item to the full board without the usual recommendation on whether to approve or not, and let the board decide,'' said a senior IAEA diplomat, who requested anonymity.

The United States and European Union urged delegates at the 35-nation IAEA board committee session yesterday to deny Iran's request for agency expertise to ensure the Arak heavy water reactor under construction upholds agency safety standards.

The IAEA board and UN Security Council have already asked Iran not to pursue the Arak project due to concerns Tehran could derive plutonium from spent uranium fuel used in the production process. Tehran has said it will launch the Arak plant in 2009.

IAEA board approval of technical aid requests by member states developing peaceful nuclear energy is usually routine.

But Western members said the Arak case must be rejected due to Iran's record of evading IAEA non-proliferation inspections and defiance of UN demands to stop enriching uranium -- behaviour for which Iran now faces the risk of UN sanctions.

Developing nations, however, argued that a rejection of Tehran's request would set a precedent for withholding technical aid from them for peaceful atomic energy programmes.

The Islamic Republic, which says its nuclear fuel programme is peaceful, has made clear it will produce only radio-isotopes for medical uses at Arak. It would replace a light-water reactor that predates Iran's 1979 Islamic revolution.

CONSENSUS ELUSIVE The compromise under consideration at the closed-door IAEA meeting would indefinitely defer, but not reject, assistance for Arak while approving seven other aid requests made by Iran.

These items have mainly to do with medical and regulatory aspects of civilian atomic energy which most board members are satisfied would not further Iran's ability to enrich uranium or reprocess spent fuel for bomb material.

The United States, most of its EU allies and some developing nations indicated they could accept this deal, diplomats said.

But some doubters remained in the Western camp, such as France, still demanding all eight projects be rejected, while a few Iran allies among developing nations, such as Cuba, were demanding all eight be approved, they said.

''There will be no broad consensus for outright rejection or outright approval on Arak, and we want to avoid a divisive vote,'' said a diplomat in the Non-Aligned Movement (NAM) which groups most developing nations, including Iran.

Tehran says its nuclear agenda is limited to generating electricity. The United States and EU fear Iran is seeking bombs to threaten Israel and Western interests in West Asia.

Iran accused Western states of double standards since they had never made an issue about similar assistance to Israel, which never joined the nuclear Non-Proliferation Treaty (NPT).

''It is shameful that countries who declare to be strong proponents of the NPT do not even dare to touch on the issue ...

of Israel, which has a long, dark record of violating all IAEA and UN Security Council resolutions and categorically rejects NPT and agency safeguards,'' Iran envoy Aliasghar Soltanieh said.

Israel is widely assumed to have West Asia's only nuclear arsenal, developed in secret outside the NPT.

REUTERS SP KP2153