World powers to discuss Iran sanctions

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LONDON (Reuters) – The five permanent members of the U.N. Security Council plus Germany will discuss imposing a third round of sanctions on Iran because of its nuclear program on Friday.

Iran has refused to stop enriching uranium and the West fears it is bent on producing atomic bombs, which Tehran denies.

The United States, which will be represented by undersecretary of state for political affairs Nicholas Burns, says it wants to make progress in outlining the sanctions resolution and ministers can then decide on its timing.

Burns said he hoped Russia and China would attend the London meeting with a “serious demeanor”. He said the two countries, major trading partners with Iran, had effectively blocked moves towards a third sanctions resolution for six months.

The United States imposed economic sanctions last week and has not ruled out military action against Iran. Russia believes dialogue rather than more punishment is the way forward while China reacted to the American move by saying it was opposed to imposing sanctions “too rashly”.

Speaking to reporters on Friday on her way to Turkey, U.S. Secretary of State Condoleezza Rice said Washington had had some “tactical” differences with China and Russia about the timing and the “depth or breadth” of a Security Council resolution.

“But the Russians — when I talked to (Foreign Minister) Sergei Lavrov yesterday — he said they were prepared to come and work on the text as we agreed when we were together last and we will just have to see how those discussions go,” she said.

The major powers agreed in late September to delay a vote on tougher sanctions until late November at the earliest after it had received reports by the U.N. nuclear watchdog and a European Union negotiator.

After four days of talks with the International Atomic Energy Agency (IAEA) in Tehran meant to help clear up suspicions about Iran’s atomic activities, both sides expressed satisfaction, Iran’s state broadcaster reported on Thursday.

Mohamed ElBaradei, head of the IAEA, is due to report in mid-November about whether Iran has answered questions about its past secret nuclear activity.

Iranian President Mahmoud Ahmadinejad said this week Tehran would not retreat in the dispute and dismissed U.S. offers of broader negotiations if Iran suspended its most sensitive atomic work.

Iran says its program is peaceful and aimed at generating electricity so that it can export more oil and gas.

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Iran dismisses the chance of a US strike

TEHRAN, Iran – The head of Iran’s elite Revolutionary Guards dismissed the possibility of a U.S. military action against Iran and warned that his forces would respond with an “even more decisive” strike if attacked, an Iranian news agency reported Friday.

The comments by Gen. Mohammad Ali Jafari came after the United States announced sweeping new sanctions against Iran focusing on the Revolutionary Guards, a force that is tasked with protecting Iran’s Islamic government and reports to the country’s supreme leader.

The sanctions step up tensions between the United States and Iran, where many fear Washington is planning military action. The U.S. accuses the Guards of supporting terrorism by backing Shiite militants in Iraq. Washington also accuses Tehran of seeking to develop nuclear weapons and has vowed to prevent it from doing so — though the Bush administration insists it is seeking diplomatic means. Iran denies trying to build weapons.

Asked about the possibility of an American strike on Iran, Jafari told reporters late Thursday that, “These words are just exaggerations, and I don’t consider them a threat,” the news agency ISNA reported.

“The Islamic Republic has the strength and power of its people’s faith. This power is joined with experience, knowledge and technology in the realms of defense. The enemy knows it cannot make any mistake, so these words are just exaggeration,” he said.

The sanctions ban U.S. dealings with the extensive network of businesses believed linked to the Guards — and put stepped-up pressure on international banks to cut any ties with those firms.

Foreign Ministry spokesman Mohammad Ali Hosseini dismissed the new U.S. measures as “worthless and ineffective” and said they were “doomed to fail as before.”

Interior Minister Mostafa Pourmohammadi vowed that anyone who attacks Iran would “find itself faced with a hard and crushing response,” though he said the probability of American attack is “very small.”

“America knows well that while it can start such an attack, how it ends will not be in Washington’s hands, and such an attack will lead to America’s collapse,” he told journalists during a visit to Kuwait on Thursday, according to the Iranian state news agency IRNA.

China, a key ally of Iran, warned Friday that the sanctions could increase tensions over Iran’s nuclear program.

“Dialogue and negotiations are the best approach to resolving the Iranian nuclear issue,” the ministry said in a brief statement in response to a question from The Associated Press. “To impose new sanctions on Iran at a time when international society and the Iranian authorities are working hard to find a solution to the Iranian nuclear issue can only complicate the issue.”

Israeli Foreign Minister Tzipi Livni was due to visit China over the weekend to lobby for intensified U.N. sanctions against Iran, the Israeli Embassy said Friday.

Washington has already won two U.N. Security Council sanctions resolutions.

Despite their government’s insistence that U.S. and U.N. sanctions aren’t causing any pain, some leading Iranians have begun to say publicly that the pressure does hurt. And on Tehran’s streets, people are increasingly worried over the economic pinch.

Iran’s economy is struggling, with dramatic price rises this year. The cost of housing and basic foodstuffs like vegetables have doubled or even quadrupled. The government also has imposed unpopular fuel rationing in an attempt to reduce expensive subsidies for imported gasoline.

The sanctions have heightened resentment of the United States among some in the public. But they are also fueling criticism among Iranian politicians that President Mahmoud Ahmadinejad is mismanaging the crisis with hard-line stances that worsen the standoff with the West.

Ahmadinejad and his allies are likely counting on sanctions to rally Iranians against the United States.

“Hard-liners in Tehran were looking forward for the sanctions. It helps them hide their incompetence behind the embargo,” said political commentator Saeed Laylaz.

But many conservatives who once backed Ahmadinejad have joined his critics. They point to his failure to fulfill promises to repair the economy — despite increased oil revenues — and say his fiery rhetoric goads the West into punishing Iran.

Ahmadinejad on Wednesday called earlier U.N. sanctions, which punish a list of Iranian companies believed linked to the nuclear program, “a pile of papers that have no value.”

Most notably, the new sanctions ban dealings with two major Iranian banks, Bank Melli and Bank Mellat, adding them to a list of already banned banks. That means the banks will have difficulty turning to European banks for dollars, said Matthew Levitt, a former Treasury Department terrorism expert now with the Washington Institute for Near East Policy.

(This version CORRECTS the spelling of Guards commander’s name to ‘Jafari’ sted ‘Jaafari’.)

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Many Europe banks already cut Iran ties

GENEVA – Britain applauded a U.S. decision Thursday to target Iran with banking sanctions, but many European financial institutions already curbed ties with Tehran and analysts said it wasn’t clear whether others would rush to take similar steps.

In the broadest U.S. unilateral penalties on Iran since 1979, the Bush administration slapped sanctions on Iran’s Revolutionary Guards, three of the largest Iranian banks and other organizations and individuals.

U.S. Treasury Secretary Henry Paulson called on “responsible banks and companies around the world” to end relationships with the three banks and companies and affiliates of the Guards.

In London, officials at Britain’s Treasury and Financial Services Authority said they were consulting with each other on the matter. “We endorse the U.S. administration’s efforts to apply further pressure on the Iranian regime,” Prime Minister Gordon Brown‘s office said.

Brown had said Wednesday that Britain was prepared to lead the way in pushing for a third round of U.N. sanctions on Iran for defying a Security Council demand that it suspend uranium enrichment, and also would support tougher European Union measures.

French Foreign Minister Bernard Kouchner, in a letter to EU counterparts earlier this month, urged them to consider new sanctions that could target companies, “particularly in the banking sector.”

European banks, many of which have big operations in the United States, tend to maintain that they act on the basis of their own or United Nations decisions, and it wasn’t immediately clear how much tightening could still be done as a result of the new U.S. measures.

The two largest German banks, Deutsche Bank and Commerzbank, said they had withdrawn from the Iranian market — but for business reasons, not as a result of political pressure.

UBS AG, Switzerland‘s largest bank, said it announced in 2005 that it would stop all business with Iran. Spokesman Serge Steiner said the decision applied to individuals, companies or state institutions and was based on the bank’s own economic and risk analysis.

Credit Suisse Group, the second-largest Swiss bank, said it decided at the same time not to enter into any new business based in certain countries, including Iran, Cuba, North Korea and Syria, spokeswoman Esther Gerster said.

“We have terminated existing relationships with corporate clients domiciled in those countries as much as possible. Therefore, it doesn’t change very much for us,” Gerster said of the U.S. move.

Cubillas Ding, a banking analyst with consulting group Celent in London, said European governments and banks want to decide on sanctions for themselves and not be seen as simply following the U.S. lead.

At the same time, Ding said, they want to avoid appearing to be failing to counter activities that could promote terrorism or threaten global security.

“Even if banks do not trumpet a philosophical reason whether or not to cut ties, they can still do it based on economic and high-risk basis. I think it is a delicate rope to walk on,” Ding said. “I would be surprised if there is a big rush immediately to follow suit.”

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Putin calls for restraint over Iran and Kosovo

LISBON (AFP) – Russian President Vladimir Putin on Thursday called on the West to show restraint over both Iran’s nuclear programme and the future status of Kosovo, ahead of an EU-Russia summit here.

Putin, in Lisbon for Friday’s meeting, warned that the threat of fresh sanctions or even military action against Iran over its nuclear programme would only make the situation worse.

He also called for “patience” on the question of the future status of Serbia‘s province of Kosovo, where the mainly ethnic Albanian population is seeking independence.

After the United States on Thursday ratcheted up tensions over Iran’s nuclear drive with a raft of new sanctions targeting the Islamic republic’s military and banks, Putin warned against harsh action.

“Why make the situation worse, bring it to a dead end, threaten sanctions or even military action,” he asked.

“You can run around like mad people wielding razor blades but it is not the best way to resolve the problem.”

Taking a peaceful approach towards North Korea in the controversy over its nuclear programme had brought the international community closer to a solution, he added.

Tehran insists it is developing a civilian programme to produce nuclear energy, but the United States, Israel and other Western powers suspect it could be masking efforts to develop a nuclear military capability.

On the issue of Kosovo, Putin said that Russia was respecting international law by opposing UN envoy Martti Ahtisaari‘s recommendation to give internationally supervised independence to the Serbian province.

“Why upset the principles of international law by encouraging separatism in Europe,” he asked.

“Don’t you have enough problems in Spain, in Belgium?”

Spain is facing renewed violence from regional Basque separatist group ETA, while there have been calls in the mainly Flemish speaking north of Belgium for greater autonomy from the mainly Francophone south.

“When we’re talking to our colleagues from the European Commission I sometimes get the impression that we are defending Europe’s interests more than our counterparts,” Putin said.

The Kremlin chief’s comments came ahead of Friday’s talks with EU leaders in Mafra, 40 kilometres (25 miles) from the capital Portuguese Lisbon, hosted by Prime Minister Jose Socrates whose country currently holds the EU presidency.

No major announcements are planned for the summit, although both EU and Russian officials have emphasised that business ties between Moscow and Brussels are booming.

Russia has complained, however, about what it calls discrimination against Russian energy companies in the European Union and EU-Russia talks on forming a new partnership are stalled.

Russia has also been angered by US plans to deploy interceptor missiles and a radar in EU member states Poland and the Czech Republic, saying the missile shield is aimed against Russia.

Washington says the shield is to fend off possible missile strikes by Iran.

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Democrats worry Bush setting up war with Iran

WASHINGTON (Reuters) – Some Democratic presidential candidates worried on Thursday the White House had begun a march to war by declaring Iran’s Revolutionary Guard a terrorism supporter while a top Republican said “bombardment” of Iran should be an option.

Republican presidential candidate Mitt Romney took a hard-line stance against Iran after the U.S. State Department imposed sanctions on the Revolutionary Guard in a bid to pressure Tehran to stop enriching uranium.

Washington also accuses Iran of supplying explosive devices to Iraqi militants that are being used to kill U.S. and Iraqi troops.

Romney, trying to win his party’s presidential nomination for the November 2008 election, said in New Hampshire the military option must be on the table in the event sanctions do not work.

“I really can’t lay out exactly how that would be done, but we have a number of options from blockade to bombardment of some kind, and that’s something we very much have to keep on the table, and if you will, ready ourselves to be able to take because frankly it’s unacceptable for Iran to have nuclear weapons,” Romney said.

Democrats, meanwhile, were afraid they were hearing a drumbeat for war against Iran, much as occurred in the run-up to the Iraq war in 2003.

“I am deeply concerned that once again the president is opting for military action as a first resort,” said Connecticut Sen. Christopher Dodd, a long-shot Democratic presidential candidate.

Dodd and others in the battle for the party’s presidential nomination took a shot at the Democratic front-runner, New York Sen. Hillary Clinton, for voting in favor of a Senate resolution that recommended the State Department label Iran’s Revolutionary Guard a terrorist organization.

“Instead of blocking George Bush’s new march to war, Sen. Clinton and others are enabling him once again,” said one candidate, former North Carolina Sen. John Edwards.

Another Democratic candidate, Illinois Sen. Barack Obama, said that unfortunately, the Senate measure “made the case for President Bush that we need to use our military presence in Iraq to counter Iran — a case that has nothing to do with sanctioning the Revolutionary Guard.”

Clinton, however, strongly defended her vote in favor of the Senate resolution, said she supported the sanctions announced by the State Department, and urged the Bush administration to engage in “robust diplomacy” with Iran.

“We must work to check Iran’s nuclear ambitions and its support of terrorism, and the sanctions announced today strengthen America’s diplomatic hand in that regard,” she said in a statement.

Clinton, trying to prevent the issue from becoming a point of contention with liberal Democrats concerned she would lead the United States into another war, has been seeking to assure Democrats her vote should not be seen as giving Bush authority for war on Iran.

“I believe that a policy of diplomacy backed by economic pressure is the best way to check Iran’s efforts to acquire a nuclear weapons program and stop its support of terrorism, and the best way to avert a war,” she said.

Clinton is still taking heat from anti-war liberals for her 2002 vote in favor of a Senate measure that authorized the use of force against Iraq.

Reuters

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US imposes new sanctions on Iran

The US has stepped up its sanctions on Iran for “supporting terrorists” and pursuing nuclear activities. The new measures target the finances of Iran’s Islamic Revolution Guards Corps and three state-owned banks.

US Secretary of State Condoleezza Rice said the moves were part of “a comprehensive policy to confront the threatening behaviour of the Iranians”.

The sanctions were backed by Britain, but a top Iranian MP dismissed them as a “strategic mistake”.

The US declared the Revolutionary Guards a “proliferator of weapons of mass destruction”, a reference to ballistic missiles they are allegedly developing, while their elite overseas operations arm, the Quds Force, was singled out as a “supporter of terrorism”.

The US has repeatedly accused Iran of destabilising Iraq and Afghanistan, blaming the Revolutionary Guards for supplying and training insurgents.

‘Proliferator’

Ms Rice said: “Unfortunately the Iranian government continues to spurn our offer of open negotiations, instead threatening peace and security by pursuing nuclear technologies that can lead to a nuclear weapon, building dangerous ballistic missiles, supporting Shia militants in Iraq and terrorists in Iraq, Afghanistan, Lebanon and the Palestinian territories, and denying the existence of a fellow member of the United Nations, threatening to wipe Israel off the map.”

Under Executive Order 13382, US authorities will be able to freeze the assets of, and prohibit any US citizen or organisation from doing business with the Revolutionary Guards.

Iran’s ministry of defence, which controls the country’s defence industry, three Iranian banks, and several companies owned by the Guards will also be designated.

“These actions will help to protect the international financial system from the illicit activities of the Iranian government,” Ms Rice said.

Analysts said it was not clear how big an effect the sanctions would have, since the Guards probably had very limited assets in the US. However, they said the move might discourage other countries from dealing with the Iranian institutions.

The Guards’ Quds Force was singled out after being accused by US officials of supplying powerful roadside bombs and rocket-propelled grenades to Shia militants in Iraq.

Thought to have 15,000 troops, it is responsible for conducting covert missions overseas and for forging relationships with other Shia groups.

“The Quds Force controls the policy for Iraq,” the top US military commander in Iraq, Gen David Petraeus, said earlier this month. “There should be no confusion about that.”

Dominant force

Iranian MP Kazem Jalali, spokesman for parliament’s foreign affairs and security commission, said the US was interfering in internal Iranian affairs.

“This will make the wall of distrust between Iran and the United States higher every day and will close down dialogue,” he told the AFP news agency.

The Revolutionary Guards force was set up shortly after the 1979 Iranian revolution to defend the country’s Islamic system, and to provide a counterweight to the regular armed forces.

It has since become the dominant military force in Iran, with past members including President Mahmoud Ahmadinejad and a number of his cabinet ministers.

It is estimated to have 125,000 active members, and boasts its own ground forces, navy and air force, and controls Iran’s strategic weapons.

It also controls the paramilitary Basij Resistance Force and the powerful bonyads, or charitable foundations, which run a considerable part of the Iranian economy.

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