The International Atomic Energy Agency (IAEA), the UN's nuclear watchdog, confirmed last week that Iran had ignored the Security Council's deadline to stop enriching uranium and had expanded its nuclear programme.

"We had a productive first discussion of the next steps following the director general of the IAEA's confirmation that Iran has failed to comply with SCR (Security Council resolution) 1737," John Sawers, the senior British Foreign Office official chairing Monday's talks, said after they broke up.

"We began work on a new Security Council resolution building on resolution 1737.

"We also considered how best to re-engage with Iran. We are all committed to seeking a negotiated solution."

US State Department spokesman Sean McCormack said the parties involved would be in touch again Thursday via telephone "to hammer out the elements of a UN sanctions resolution".

He said the parties still wanted Iran to negotiate, but added: "We are equally committed to sending the message to the Iranian government: should they choose not to proceed down that pathway, then there will be consequences."

The already tense backdrop to the meeting was fuelled Sunday when Iran sent its first rocket into space and hardline President Mahmoud Ahmadinejad likened uranium enrichment to "a train on a one-way track".

There were also fresh indications of disagreement between some Security Council permanent members going into the talks.

The US, France and Britain want the Security Council to impose fresh sanctions but Russia and China, which hold veto rights and have economic, energy and strategic interests in Iran, are reluctant to pile on the pressure.

After US Vice-President Dick Cheney said last week that "all options are still on the table" for dealing with Tehran, Russian Foreign Minister Sergei Lavrov expressed concern over talk of military tactics.

"We are worried that the forecasts and suppositions of a possible attack on Iran have become more frequent," he said.

Britain, meanwhile, insisted that the international community remains united in seeking to persuade Tehran to back down.

A spokesman for British Prime Minister Tony Blair said that Iran should not "make any mistake about the unity of the international community in opposition to its continued flouting of what the UN has said its obligations are."

US Secretary of State Condoleezza Rice again offered Sunday to hold negotiations with Iran if it suspends enrichment.

"We're leaving open the track of negotiations, because the best way to resolve this would be to have Iran come to the table," she added.

In response, Iran stressed Monday that it would consider talks but would not stop its nuclear programme as a precondition.

"If the United States presents a request for negotiations through the official channels and it appears these negotiations are positive and constructive and logical, we are ready to examine this request with a positive eye," chief negotiator Ali Larijani told the IRNA agency.

"Fixing preconditions means that you have already determined the result of negotiations in advance and it is for this reason that such policies have produced no result up to now."

The US, while insisting it has no military plans against Iran, is beefing up its naval firepower in the Gulf.

Two US aircraft carrier groups are now there -- the highest concentration since the 2003 invasion of Iraq.

The New Yorker magazine reported Sunday that it is stepping up covert operations in Iran in a new strategy that risks sparking an "open confrontation" and benefits Sunni radicals.

Tehran insists that its uranium enrichment programme is designed to fuel power stations for civilians.

earlier related report
Ex-NATO Commander Cautions Iran
by Dalal Saoud - UPI Correspondent Jeddah, Saudi Arabia (UPI) Feb 26 - A gradual withdrawal from Iraq, a diplomatic offensive in the Middle East and dialogue with Iran over its nuclear program could help introduce needed change of policy according to NATO's former Supreme Allied Commander Europe Gen. Wesley Clark.

Clark, who took part in the negotiations that ended the Bosnia conflict and led the 19-nation NATO force to end Serb ethnic cleansing in Kosovo, cautioned Iran over the U.S. recent military build-up in the Gulf region and its determination to prevent Tehran from acquiring a nuclear weapon.

"If I were the Iranians, I would take very seriously the statements made by the (Bush) administration and the presence of the aircraft carriers (in the Gulf)," Clark said during an interview with United Press International, while attending the Jeddah Economic Forum.

Asked if the U.S. reinforcements in the Gulf signal preparations for a possible strike against Iran, he said: "Certainly, it's an indication, a potential... If I were the Iranians, I would take very seriously the U.S. capabilities present in the region."

Tehran, he said, needs not to expect "that the world is going to acquiesce an Iranian nuclear weapon. It's up to Iran to solve this diplomatically and the U.S. and Iran should have a dialogue."

Although Iranian officials repeatedly emphasized their peaceful nuclear activities and denied aiming at acquiring a nuclear bomb, Clark warned: "As Iran is persistent in trying to conceal its nuclear weapons program and continues to work toward acquiring a nuclear weapon, then the problem cannot be solved."

The question remains: Would President George W. Bush strike Iran despite the failure in Iraq? And would attacking Iran serve its purpose?

Such a strike "depends on a number of factors", according to Clark. "I think there is a military option but it's not an attractive option. The right solution is a diplomatic solution. Iran needs to understand that it's much safer and it would be able to pursue its aims much more effectively if it doesn't have a nuclear weapon."

While difficult to predict Bush's next move against Iran, Clark said the Democrats, who now control the Congress, would try to influence his decision by insisting that the U.S. president "completes his process of dialogue and uses every other alternative before he resorts to military force."

However, restoring trust and building up a minimum level of confidence is needed to help pave the way for such a dialogue.

Iran and Syria, which felt threatened when the U.S. controlled Iraq after toppling President Saddam Hussein and his Baath Party in 2003, indeed had no intention to facilitate Washington's mission.

"It shouldn't be a surprise that they (Iran and Syria) work against the interests of the U.S. because they knew once the U.S. succeeded in Iraq, they would be next," said Clark. "It is normal to believe that these two regimes will resist being changed." He explained that Iran "has played a very nuanced game permitting the U.S. to attack (Iraq) and take off the Baathist threat while building up its own protective force through the militias and through its influence inside the political structure in Iraq... They took advantage of the chaos and confusion of the aftermath of the (2003) American military action."

According to the former NATO commander, who was also a Democratic candidate for U.S. presidential elections in 2004, the U.S. action in Iraq "has been a source of instability in the region" and this problem could not be solved "just by force of arms."

"What we really needed to do in Iraq and the region was not a troop surge but a diplomacy surge," he said. "It takes diplomacy and an expanded political push in the region to resolve this problem.... But I don't think President Bush is yet taking important steps he needs to take in terms of promoting a dialogue in the region."

Fears of the Iraq conflict expanding to other countries are well justified.

"I think Lebanon in particular is in peculiar position," Clark noted, expressing hope that the Lebanese government of Prime Minister Fouad Siniora will hold and Iran-backed Hezbollah turns into "a political movement... as it can't be permitted" to keep its weapons independently of the government.

What is the best way out for the U.S. in Iraq?

A slow withdrawal coupled with a diplomatic offensive that changes the dynamics in the region "from a dynamic of conflict to a dynamic of economic development" might be the answer, Clark explained.

Would a war break out between Syria and Israel?

"I would be surprised if there is war between Syria and Israel because Syria knows what the consequences of this would be," the 63-year-old retired general said. "I don't think Syria would initiate a war in order to restart the peace talks. They would be playing a very dangerous game."

Feeling the growing dangers in the region, Saudi Arabia -- a close U.S. ally -- stepped in, initiating a dialogue with Iran to avoid a widening of the Iraq conflict, helping promote a peaceful resolution of the Iranian nuclear problem and its alleged "hegemonic attempts" in the region.

It would be hard to predict whether the Saudi effort will succeed at this crucial time and while the stakes of the region plunging into a destructive Shiite-Sunni confrontation are high.

"I think the Saudi role is potentially critical in this region. It is very important in the sense of helping bring neighbors together to discuss common issues," Clark said.

But as long as Bush maintains his "Stay the Course" policy, no big changes are expected until the next U.S. presidential elections.

earlier related report
Humiliated Iran could become another Iraq: Blix
New York (AFP) Feb 26 - Former UN weapons inspector Hans Blix, a key opponent of the US-led invasion of Iraq, on Monday warned that "humiliating" Iran over its uranium enrichment could spawn intransigence. "It's an observation I've made before regarding Iraq," he told reporters.

"Why did the Iraqis behave as they did in the 1990s (and) send away the UNSCOM inspectors and close the door to them?" he asked, referring to the UN Special Commission mandated to inspect Iraqi weapons of mass destruction after the 1991 Gulf War.

"One element was 'humiliation'," he said. "It was not rational of them to stop the inspections, it really worked against their own interest and yet I can see that the humiliation, the fury, was such that they said, 'To hell with it'," said Blix.

Blix, currently head of the independent Swedish Weapons of Mass Destruction Commission, was prior to the 2003 invasion of Iraq, head of the UN Monitoring, Verification and Inspection Commission.

UNMOVIC performed weapons inspections in Iraq, until, Blix contends, heightened demands on Iraq, such as opening presidential palaces to inspection, forced the country's leadership to become intransigent.

The United States cited Iraq's rejection of inspections as a cause for the March, 2003 invasion to depose Saddam Hussein. But none of the weapons of mass destruction the United States claimed Iraq had were ever found.

As for Iran, "I think there is a similar thing there and one feature, which is now key and peculiarly not very much debated ... is the demand -- first of the Europeans and then of the US and also of the (UN) Security Council -- that first Iran must suspend enrichment," he said.

"This is, in a way, like telling a child, 'now first you behave and thereafter you'll be given your rewards'. And this I think is humiliating," the veteran diplomat said.

Iran's chief nuclear negotiator Ali Larijani told the IRNA agency Monday Tehran would be ready to examine a US request for talks but would not halt sensitive nuclear fuel enrichment as a precondition.

"Fixing preconditions means that you have already determined the result of negotiations in advance and it is for this reason that such policies have produced no result up to now," he said.

Iran says its enrichment of uranium is for peaceful power generation, while Western powers fear the fuel could be used in bombs.

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