Merkel confident world powers will agree on Iran

BERLIN, Mar 10 (Reuters) German Chancellor Angela Merkel said on Saturday she was confident world powers would agree on further steps against Iran, which has repeatedly defied international calls to suspend its nuclear fuel programme.

Merkel's comments come a day after China, backed by Russia, balked at the idea of financial sanctions against Iran during talks among six powers on a new UN Security Council resolution that would penalize Tehran for its nuclear programme.

''I'm optimistic we will succeed in agreeing on the next steps,'' Merkel said in a speech at a conference on Israel's relations with Europe in Berlin.

She reiterated the Western view that Tehran, which the European Union and United States suspect is developing nuclear weapons under cover of a civilian energy programme, needs to freeze its uranium enrichment programme.

If it does, then Germany, the United States, Russia, China, Britain and France will be ready to negotiate on a package of incentives offered to Iran in June 2006 to resolve the standoff, she said.

Iran denies it is developing atomic bombs and insists its nuclear ambitions are limited to peaceful power generation..

The Security Council approved a package of limited sanctions in December. That resolution included a February 21 deadline for Iran to suspend enrichment.

Tehran ignored the deadline and the six powers are discussing a tougher package of penalties. But both China and Russia have problems with the latest draft.

These proposals, set out in a March 3 working paper, would expand a list of people, firms and groups whose assets would be frozen or with whom trade would be restricted, such as Iran's Revolutionary Guards and the state-owned Bank Sepah.

Merkel, who is presiding over Germany's EU presidency, stressed the need to maintain unity as the international community intensifies pressure on the Islamic republic.

''It was right to strive to maintain a common front with Russia and China,'' she said.

Moscow and Beijing, like Washington, London and Paris, have veto powers on the 15-nation Security Council.

HARSH WORDS FOR SYRIA Merkel made it clear that in her view Iran is not the only mischievous player in the region. She accused Israel's neighbour Syria of doing nothing to improve the situation in Lebanon or the broader West Asia.

''Everything indicates that Syria is either not in a position or lacks the will to take one step in the direction of the vast majority of the international community,'' she said.

The door to negotiations remained open to Damascus if it was willing to cooperate, Merkel said.

''Small signs of cooperation must be visible. Unfortunately none are,'' she said. ''There is no cooperation coming from Syria regarding the strengthening of Lebanon's sovereignty.'' ''It would be easy for Syria to at least diplomatically recognise Lebanon,'' Merkel said.

Israel and the United States have accused Syria of supporting radical groups in Lebanon and insurgents in Iraq, allegations that Damascus vehemently denies.

Reuters DKS VP0100