Western countries called on Wednesday for new sanctions against Iran over a UN report that it has worked to design atom bombs, but veto-wielder Russia indicated it would block new measures at the UN Security Council.
The report, obtained by Reuters on Tuesday, laid bare a trove of intelligence suggesting Iran is seeking nuclear weapons, including accusations of work on atom bomb triggers and computer-simulated detonations.
France said it would summon the Security Council. Britain said the standoff was entering a more dangerous phase and the risk of conflict would increase if Iran does not negotiate.
The Security Council has already imposed four rounds of sanctions on Tehran since 2006 over its nuclear programme, which Western countries suspect is being used to develop weapons but Iran says is purely peaceful.
There has been concern that if world powers cannot close ranks on isolating Iran to nudge it into serious talks, then Israel - which feels endangered by Tehran's nuclear programme - will attack it, precipitating a Middle East conflict.
"Convening of the UN Security Council is called for," French Foreign Minister Alain Juppe told RFI radio. Pressure must be intensified, he said, after years of Iranian defiance of UN resolutions demanding it halt sensitive uranium enrichment.
"If Iran refuses to conform to the demands of the international community and refuses any serious cooperation, we stand ready to adopt, with other willing countries, sanctions on an unprecedented scale," Juppe said.
But Moscow made its opposition to new sanctions clear.
"Any additional sanctions against Iran will be seen in the international community as an instrument for regime change in Iran. That approach is unacceptable to us, and the Russian side does not intend to consider such proposals," Deputy Foreign Minister Gennady Gatilov told the Interfax news agency.
Iran has repeatedly insisted it wants nuclear energy only for electricity. On Wednesday it vowed no retreat from its atomic path following the UN watchdog report, which used Western intelligence information that Tehran calls forgeries.
"You should know that this nation will not pull back even a needle's width from the path it is on," President Mahmoud Ahmadinejad said in a speech carried live on state TV.
"Why do you damage the agency's dignity because of America's invalid claims?" he said, apparently addressing IAEA Director-General Yukiya Amano.
A rise in tension could boost oil prices, although the prices of both Brent crude and US crude fell by more than $2 on Wednesday to about $112.50 and $94.50 a barrel in European afternoon trade because of Italy's debt worries.
"Now, with the more conclusive reports that Iran might be pursuing a nuclear warhead and the increased risk that there may be an attack on those facilities which would likely disrupt their oil exports, there may be growing concerns that there may be an oil price spike on the back of such an event," said Nicholas Brooks, head of research at ETF Securities.
In addition to UN sanctions that apply to all countries, the United States and European Union have imposed sanctions of their own. A US official told Reuters that because of Russian and Chinese opposition, chances were slim for another UN Security Council sanctions resolution against Iran.
Washington might extend sanctions against Iranian commercial banks or front companies but is unlikely to go after its oil and gas industry or central bank, the clearing house for energy trade, for now.
"The reality is that without being able to put additional sanctions into these key areas, we are not going to have much more of an impact than we are already having," he said.
British Prime Minister William Hague spoke about measures that could still be imposed.
"We are looking at additional measures against the Iranian financial sector, the oil and gas sector, and the designation (on a sanctions list) of further entities and individuals involved with their nuclear programme," he told parliament.
"We are entering a more dangerous phase," Hague said. "The longer Iran goes on pursuing a nuclear weapons programme without responding adequately to calls for negotiations from the rest of us, the greater the risk of a conflict as a result."
He added that Iran's nuclear programme increased the likelihood that other Middle East states would pursue weapons.
Veto wielders Russia and China have signed up to limited UN sanctions but have rebuffed Western proposals for sanctions that could seriously curtail energy and trade ties with Iran.
Iran is the third largest supplier of crude oil to China, and overall bilateral trade between the two grew by 58 percent in the first nine months of 2011, according to Beijing data.
Foreign Ministry spokesman Hong Lei said China was studying the IAEA report and reiterated a call to resolve the row through talks. In a commentary, China's official Xinhua news agency said the UN watchdog still "lacks a smoking gun".
"There are no witnesses or physical evidence to prove that Iran is making nuclear weapons," it said. "In dealing with the Iran nuclear issue, it is extremely dangerous to rely on suspicions, and the destructive consequences of any armed action would endure for a long time."
Israel held back a response on Wednesday to the IAEA report, first evaluating the international impact.
Government sources said Prime Minister Benjamin Netanyahu ordered cabinet ministers not to speak out about the UN watchdog's findings, a sign he may prefer for now to let world powers take the lead in charting moves to rein in Iran.
Israel, widely believed to be the Middle East's only nuclear power, has said all options are on the table, including a military one, to halt an Iranian nuclear fuel production drive that is now being transferred to an underground mountain bunker better protected from possible air strikes.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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