By Arshad Mohammed and Evelyn Leopold
World powers agree to delay vote on sanctions until November, wait on reports by nuclear watchdog IAEA.
The world's major powers agreed on Friday to delay a vote on tougher sanctions on Iran until late November at the earliest, depending on reports by the UN nuclear watchdog and a EU negotiator.
The outcome was a temporary setback for the US and France, which have sought to step up economic and political pressure on the Islamic Republic over its refusal to halt uranium enrichment, which the West suspects is aimed at developing nuclear arms.
Foreign ministers of the US, Russia, China, Germany, France and Britain asked EU foreign policy chief Javier Solana to hold more talks with Iran's national security chief, Ali Larijani, while the International Atomic Energy Agency (IAEA) tries to clear up doubts about past nuclear activities.
"We agree to finalise a text for a third UN Security Council sanctions resolution... with the intention of bringing it to a vote... unless the November reports of Dr Solana and [IAEA chief] Dr [Mohamed] ElBaradei show a positive outcome of their efforts," they said in a joint statement.
The decision to make another stab at the EU-led diplomacy while brandishing the threat of fresh sanctions if it fails appeared to reflect a compromise among the major powers.
In a sign of the divisions, Russia stressed negotiations while the US emphasised the threat of sanctions.
"What we discussed is to concentrate on doing everything to help negotiations to succeed," Russian Foreign Minister Sergei Lavrov told reporters.
In contrast, US Secretary of State Condoleezza Rice told reporters the big powers would carefully assess whether the IAEA and EU make headway, adding that "we can move to Security Council sanctions should there not be progress".
The group's political directors are likely to meet twice over the next month to draft a new sanctions resolution ahead of reports from the EU3 and IAEA in November.
"Unity over haste"
A European diplomat involved in the process called the statement "a victory for unity over haste", noting that tough negotiations lay ahead both on the content of possible sanctions and on what would constitute progress by Iran.
Russia and China opposed an early move to tighten economic sanctions, saying Tehran should be given more time to cooperate with the IAEA to shed light on its past activities.
Iran's foreign minister, speaking as the major powers met elsewhere in New York, defiantly said sanctions would not change what he called Tehran's "rational" nuclear policy.
Manouchehr Mottaki told the Asia Society: "Sanctions as a political tool for exerting pressure is ineffective in making Iran change its basically rational policy choice."
Iranian President Mahmoud Ahmadinejad's defiant statements at the UN General Assembly this week that the nuclear issue is "closed" and that Tehran will ignore the Security Council appeared to have little effect on the debate.
Iran says its nuclear programme is to generate power so that it can export more of its valuable oil and gas.
Despite Western criticism of ElBaradei's agreement with Iran on a work programme to clear up questions on its past nuclear activities, seen in Washington as a tactic to stall sanctions and evade the central issue of halting enrichment, the major powers' statement welcomed the accord.
"We call upon Iran, however, to produce tangible results rapidly and effectively by clarifying all outstanding issues and concerns on Iran's nuclear programme, including topics which could have a military nuclear dimension," the ministers said.
Rice held separate back-to-back meetings, first with all six foreign ministers, then with just the three Europeans.
Diplomats said the purpose was to press the Europeans to take their own measures to restrict trade credits, investment and financial flows with Iran if Washington could not get Moscow and Beijing to agree to early UN action.
Many European officials were hesitant about acting outside the UN framework, arguing that the unity of the international community so far has surprised and shaken Iranian leaders, and that any split would be easy for Tehran to exploit.
"I believe that what impresses Iran the most is the unity of the six. Iran's strategy is to split the six but it hasn't succeeded so far," said German Foreign Minister Frank-Walter Steinmeier.
European investment in Iran is already falling dramatically - British Foreign Secretary David Miliband cited a 40% fall in the first half of this year. - Reuters