(CNSNews.com) - Iran's decision to resume nuclear research, suspended under outside pressure two years ago, has brought relations between Tehran and the West to a new low.
Six months after his unexpected election victory, Iranian President Mahmoud Ahmadinejad this week signaled a further shift in foreign policy, charging that his predecessors' diplomacy and detente with the West had been a waste of time.
The theme was picked up by Tehran's top nuclear negotiator, Ali Larijani, who was quoted as telling Iranian television that the previous government's agreement to suspend research and development on atomic fuel had been "irrational" and "a mistake."
That agreement was reached in late 2003 during negotiations with the European Union, represented by the "E.U.-3" trio of Britain, Germany and France.
Iran on Tuesday formally notified the U.N. nuclear watchdog, the International Atomic Energy Agency (IAEA), that it was lifting the suspension, with research to resume on January 9.
The latest move brought expressions of concern from the E.U.-3, with German and French officials calling it worrying and IAEA director-general Mohamed ElBaradei asking Iran to clarify the decision.
The State Department said that if Iran does take further steps related to uranium enrichment, "then the international community should consider additional measures to constrain Iran's activities."
The U.S. and E.U. suspect that the nuclear activities - pursued in secret for 18 years until exposed in 2003 - are a cover for developing nuclear weapons.
Iran denies the charge, saying the program is purely for generating electricity, and asserting it has the right under international treaties to a peaceful nuclear power program.
But Washington says that by concealing its activities Iran has squandered the international community's trust. It also questions Iran's need for nuclear energy.
"Iran is a country that is rich in hydrocarbons, both in gas reserves and oil reserves," State Department spokesman Sean McCormack told a briefing.
"Why they believe they need a civilian nuclear power-generating capacity is, frankly, inexplicable."
Russia, which is helping Iran to build nuclear reactors, has also been under pressure from the West.
With the breakdown of Iran-E.U. talks, Moscow late last year proposed a compromise that would allow Iran to enrich uranium and obtain nuclear fuel for a civilian program - but to do so on Russian soil.
The U.S. called the suggestion "very interesting," but Larijani on Sunday rejected it, saying the plan was flawed. It was not logical for a country to entrust its energy security to another, he said.
Russian officials plan to visit Tehran this weekend in a bid to urge a change of heart.
Attention now swings back to the IAEA's 35-member board of governors, which has eight times since 2003 passed resolutions urging Iran to comply with its obligations.
A resolution last September laid the groundwork for Iran's referral to the U.N. Security Council - an approach long favored by the U.S. - by the board's next meeting in November.
In November, however, the IAEA board decided to set aside referral to the Security Council in favor of exploring the Russian compromise proposal.
With Iran now having rejected that plan, the U.S. and its allies are expected to push again for referral - a step resisted so far by a number of mostly "non-aligned" developing nations represented on the board.
"Barring an unexpected breakthrough this month, Europe and the United States must now hope that Iran's intransigence will prompt Russia, China, and the Non-Aligned Movement to support Iran's referral to the U.N. Security Council at the next [IAEA] meeting, in February," said Valerie Lincy of the Wisconsin Project on Nuclear Arms Control.
Turning up the pressure on Tehran, the U.S. Treasury on Wednesday announced it was freezing the assets of two Iranian companies because of their involvement in weapons of mass destruction proliferation.
A spokesman said Novin Energy and Mesbah Energy were fronts for the Atomic Energy Organization of Iran (AEOI), an entity designated by the Treasury as a WMD proliferator last June.
The department said Mesbah Energy had been obtaining products for a "heavy water" program that would provide "a potential source of plutonium well-suited for nuclear weapons."
"Heavy water is believed to have no credible use in Iran's civilian nuclear power program, which is based on light-water reactor technology," it added.
"Identifying and designating supporters of WMD proliferation disrupts the networks that are vital to illicit weapons programs," said the department's undersecretary for terrorism and financial intelligence, Stuart Levey.
See earlier story:
Iran Unyielding on Nuclear Fuel Work (Nov. 28, 2005)
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