ARAB-US RELATIONS - Nov 18 - US Backs Role For Iran In Nuclear Fuel Cycle.

In a major concession towards Iran's nuclear programme, the US gives its public backing to a proposal by Russia and the EU that will allow the Islamic republic to develop part of the nuclear fuel cycle on its own territory. The shift in US policy - revealed after talks between Pres Bush and the Russian leader Vladimir Putin, - came despite a report from the UN nuclear watchdog that lent credence to US and European claims that Iran is trying, or once had ambitions, to develop nuclear weapons. The IAEA, in a report to its board, said Tehran recently gave it an old document on how to shape uranium into hemispheres - a procedure primarily used to engineer nuclear explosions. However, the IAEA said the information came in a series of documents mostly dating from the 1970s and 1980s. It said Iran insisted that the information came from its black-market supply network and was not requested by Tehran. In Busan, South Korea, Stephen Hadley, the US national security adviser, said the US supported a Russian proposal that would give Iran an assured supply of nuclear fuel. Under the proposal, Russia would take uranium that Iran had converted into gas in its own facilities, enrich it in a Russian plant that would be under part-Iranian management then deliver it back to Iran to be used as fuel in its civilian reactors. It was a "potential avenue" out of the impasse, Hadley said. Bush gave his personal backing to the initiative in his meeting with Putin, officials said. The US has previously rejected proposals that would allow Iran to develop part of the nuclear fuel cycle, on the grounds that Iran would try to divert UF-6, the converted gas, into a covert enrichment programme for bomb-making. Cliff Kupchan, analyst for the Eurasia Group consultancy, described the shift as a "huge concession" by the US. Only three days earlier, State Sec Condoleezza Rice, had sought to deny any US support for the proposal that diplomats said was presented to Iran by Russia's FM. "There is no US-European proposal to the Iranians. I want to say that categorically", Ms Rice said. Diplomats said the shift reflected a more realistic position by the US which was struggling to find the diplomatic support for imposing sanctions on Iran after referral to the UN Security Council. The US may also be gambling that Iran will reject the proposal which Hadley said required Iran to give up its "right" to enrich uranium on its territory. Iran has not formally responded to the proposal. Britain, France and Germany, which have led an EU effort to reach a deal, are reluctant to refer Iran to the Security Council at the IAEA board meeting next week while diplomacy can run its course. The IAEA has already sifted through evidence that the Iranians have produced polonium, an element that has few uses other than in nuclear explosions. The US has also shown its partners what it says is intelligence data demonstrating that Iran has sought to "weaponise" its uranium production.