US sees limits, manipulation in Iran deal with IAEA

VIENNA, Aug 22 (Reuters) A nuclear cooperation pact Iran struck with the International Atomic Energy Agency has ''real limitations'' and Tehran should stop trying to manipulate the IAEA to dodge harsher UN sanctions, a senior US envoy said.

Washington was not impressed by Iran's transparency promise -- hailed as a ''milestone'' by the IAEA yesterday -- to allay suspicions it is secretly seeking atomic bombs, and would still pursue talks on more UN sanctions against Tehran, the US envoy to the UN nuclear watchdog, Gregory Schulte, said.

The IAEA declined comment on Schulte's criticism. A diplomat close to the Vienna-based agency said Schulte's remarks ''shows a deliberate campaign to derail this process''.

Schulte said Washington welcomed any progress in resolving troubling questions about Iran's nuclear activities.

''But we understand there are real limitations with the plan, including Iran's continued refusal to implement the IAEA's Additional Protocol,'' he told reporters by conference call.

He was citing a measure allowing inspectors to conduct spot checks at sites not declared to be nuclear but regarded as important to resolving four-year-old IAEA investigations into the nature and scope of Iran's atomic programme.

The deal is meant to answer IAEA questions about indications of illicit military involvement in Iran's declared drive for peaceful nuclear energy and to improve access for UN inspectors to its underground uranium enrichment plant.

The IAEA's top negotiator said the plan had a timetable and steps to carry it out would start shortly. Neither side disclosed what precisely Iran would do and by when. Details should emerge in a report to the IAEA board by early next month.

Western diplomats believe Iran is making a display of cooperation to split key world powers over the need for stiffer sanctions -- Russia and China are reluctant -- and wants to buy time so it can master enrichment capability.

Schulte said Iran's suggestion it would not implement the transparency plan unless the UN Security Council shelved steps to intensify the mild sanctions imposed on the Islamic Republic over its refusal to stop enrichment was unacceptable.

''If Iran's leaders truly want the world's trust, they would stop trying to manipulate the IAEA, start to cooperate fully and unconditionally and suspend activities of (world) concern.

''Iran is clearly trying to take attention from its continued development of bomb-making capability. I don't think the Security Council will be distracted (by this deal),'' he said.

US-IAEA TENSIONS The diplomat close to the IAEA told Reuters that Schulte's comments were ''very unhelpful'' ... Such immediate downplaying of this development is disingenuous''.

''To expect Iran now to comply on the whole package of demands by the Security Council, all at once, when they remain under sanctions, is unrealistic,'' the diplomat said.

Tehran said it was ''serious'' about implementing the plan.

Western powers suspect Iran's declared goal to refine uranium for electricity so it can export more of its oil is really a cover for perfecting the means to make nuclear bombs.

France said Iran could not restore international confidence just by a pledge to open its books to IAEA sleuths.

''Iran must accept a suspension of its sensitive activities, failing which the international community will have no option but to maintain its attitude of firmness, including by passing a third sanctions resolution...,'' French Foreign Ministry spokesman Denis Simonneau said at an on-line news conference.

European diplomats said only Iranian actions would matter. A similar timetable for transparency, in 2004, came to nothing.

Gary Samore at the Council on Foreign Relations in New York said Iran retained an edge in its standoff with the West.

''The US is bogged down in Iraq, other big powers are loath to impose significant economic penalties on Iran. But Iran will have to do enough so this process doesn't look like a charade, and make it hard for Russia to argue it should be given time.'' REUTERS GT RN2130