Rice, Lavrov clash on Iran sanctions in G8-sources

NEW YORK, Sep 26 (Reuters) US Secretary of State Condoleezza Rice and Russia Foreign Minister Sergei Lavrov clashed over sanctions against Iran's nuclear program at a meeting of world powers today, participants said.

''There was a very blunt exchange between Sergei and Condi,'' said one European official present at a lunch of foreign ministers of the Group of Eight nations -- the United States, Russia, Japan, Canada, Germany, France, Britain and Italy.

Washington and Paris are pushing for tougher United Nations sanctions against Tehran over its refusal to suspend uranium enrichment, which the West suspects is aimed at developing a nuclear weapon.

Moscow opposes further sanctions, arguing that Iran is cooperating with the UN atomic watchdog to clear up questions about its past nuclear activities and should be given a change to satisfy the agency's requirements.

Lavrov was particularly withering in attacking Western moves to take unilateral sanctions outside the UN framework if the Security Council was deadlocked, the participants said.

Asked whether they had made any progress on Iran, French Foreign Minister Bernard Kouchner laughed and said: ''I wouldn't exactly say so, no.'' British junior foreign minister Mark Malloch Brown said the tone was ''pretty rough.'' The United States earlier rejected Iran's claim that the political issue over its nuclear program was ''closed,'' as Iranian President Mahmoud Ahmadinejad told the UN General Assembly yesterday.

Iran says its program is purely to produce civilian power, and remaining ''technical'' questions should be handled by the International Atomic Energy Agency.

''The case is not closed,'' US Under Secretary of State Nicholas Burns told reporters, adding that major powers would meet on Wednesday evening to discuss fresh UN Security Council sanctions against Iran.

''He is completely mistaken and the international community is not going to allow him to forget about the fact that his country is operating against the wishes of the Security Council,'' he added.

The Security Council has demanded that Iran suspend its uranium enrichment and imposed two sanctions resolutions against Tehran for its failure to do so.

Iran agreed with the IAEA on August 21 that it would explain the scope of its nuclear program.

The pact allows Iran to settle questions one by one over a period the IAEA says will run to December -- even as Iran adds centrifuges to its Natanz enrichment plant, nearing the 3,000 needed to start producing usable quantities of nuclear fuel.

Western powers have cast doubt on the deal, saying it allows Tehran to string out answers to questions about past, hidden nuclear work while maintaining its enrichment program.

The prospect of a nuclear-armed Iran is unacceptable to the United States, which accuses Tehran of sponsoring terrorism, and to Arab nations who fear Iran aims to dominate the region.

Officials from the Gulf Cooperation Council -- which groups Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the United Arab Emirates -- as well as from Egypt and Jordan voiced concerns about this in talks with Rice, saying they need arms to counter such a threat.

''They have defense needs,'' said a US official who asked not to be named because he was not authorized to speak publicly. ''They are not going to succumb to Iranian hegemony and in order to be able to do that they need the wherewithal.'' Political directors of Germany and the five permanent UN Security Council members -- Britain, China, France, Russia and the United States -- were scheduled to discuss a third resolution over dinner today. They plan to meet again on Thursday ahead of a P5+1 ministerial meeting on Friday.

IAEA Director Mohamed ElBaradei has stressed Iran's file is not closed and will not be even if it resolves outstanding questions since they only deal with past Iranian concealment.

He has said the IAEA cannot declare Iran's program is wholly peaceful until Tehran permits wider inspections to check there is no nuclear activity at undeclared sites.

Reuters KK VP0253