IRAN - The Nuclear Issue.

Tehran has been issuing contradictory statements about its nuclear programme. But they include hints that the current international campaign to bring Tehran back to the negotiating table may be taking effect - that a diplomatic solution, guaranteeing Iran's access to nuclear energy for peaceful uses but barring its development of nuclear weapons, is still achievable.

Recently President Ahmadi-Nejad declared that Iran was now enriching nuclear fuel on an industrial scale, a claim that the head of the IAEA, Muhammad ElBaradei, discounted. Ahmadi-Nejad warned foreign powers to stop trying to put pressure on Iran to suspend its enrichment of uranium and to accept that Iran's nuclear programme was "irreversible".

Striking a markedly different pose, SNSC head Larijani said: "Today, with the nuclear fuel cycle complete, we are ready to begin real negotiations with the aim of reaching an understanding".

Iran's theocrats would not admit they seriously miscalculated the international unity that Tehran's breach of IAEA obligations has produced. Russia and China have joined the US and the Europeans in voting for two unanimously approved sanction resolutions in the UN Security Council (UNSC). Though mild, these sanctions target individuals and entities involved in the nuclear programe. They make it extremely difficult for Iran to purchase abroad the specialised pumps, valves, and piping which Iranian engineers need to achieve Tehran declared goal of assembling 54,000 centrifuges able to enrich uranium on a truly industrial scale.

The US Treasury has persuaded international banks to cease doing business with Iran and governments to stop providing credits for commerce with Iran. These measures are beginning to have a devastating effect on the Iranian economy.

The Boston Globe last week said: "It would be consistent with Iran's triumphalist playbook to declare victory over arrogant foreigners at the very moment it is preparing to cut a deal that could bring it the civil nuclear energy it wants and the economic help it needs in exchange for a verifiable accord not to pursue nuclear weapons.

"There are various technical arrangements that could satisfy Iran's legitimate desire for nuclear fuel to run power plants - if there is the political will in Tehran to strike a deal.

"Iran is now facing a stark choice between isolation and cooperation because factions of the Bush administration that favor consensus-building and patient diplomacy have had their way on the Iran dossier. The hard-liners who believe in standing on the sidelines and shouting about an axis of evil have proved that their kind of statecraft goes nowhere".

An IAEA disclosed on April 18 suggests that Iran has started enriching small amounts of uranium gas at its underground plant and is already running more than 1,300 of the centrifuges. The confidential document - a letter to Iranian officials from a senior staff member of the UN agency - also protests an Iranian decision to prevent IAEA inspectors from visiting a heavy-water facility which, when built, will produce plutonium. Enriched uranium and plutonium can both be used for the fissile core of nuclear warheads.

In the previous week, Iran said it had begun operating 3,000 centrifuges at its Natanz facility, nearly 10 times the previously known number. The US, Britain, France and others criticised the announcement, but experts - and several world powers - expressed scepticism that Iran's claims were true and diplomats in Vienna familiar with the state of the programme said they were greatly exaggerated.

Still, the one-page letter reflected a swift advance in the programme. A little more than two weeks earlier, those diplomats had said Tehran was running only a little more than 600 centrifuges, and had not introduced any uranium gas into them. The letter, signed by the Deputy Director-General of the IAEA, Olli Heinonen, and dated April 18, said the agency wanted to "take note of the information provided by Iran" that it had "put into operation" 1,312 centrifuges.

The letter cited Iranian information to the IAEA that "some UF6 is being fed" into the centrifuges, referring to the uranium gas which can be enriched to levels potent enough to be used for nuclear arms.

Iran says it wants to enrich uranium only to lower levels suitable to generate nuclear power. But suspicions about its ultimate intentions, after nearly two decades of secrecy exposed only four years ago, have led to UNSC sanctions for its refusal to freeze its enrichment programme.

It was unclear what the purpose of the uranium gas feed was. An un-named diplomat accredited to the IAEA, on April 19 was quoted as saying the operation appeared to be part of "stress tests" meant to see if the machines were running smoothly. But he and another diplomat said that even if the operation was not meant to enrich large amounts of uranium it appeared to be the last step before larger-scale enrichment was to begin.

Iran's heavy-water enrichment facilities at Arak are under suspicion, because the plant - once built - will produce plutonium, which can be used in an arms programme. Tehran says it needs the plant for medical research, despite a UNSC demand that it also freeze construction at Arak. It is said that, when it is completed within the next decade, Arak will produce enough plutonium for two bombs a year.

Iran announced last month that it was unilaterally abrogating part of its Safeguards Agreements linked with the IAEA, under which Tehran is obligated to report to the agency six months before it introduces nuclear material of any kind into any facility. In his letter, Heinonen suggested that Iran had invoked this move in denying his inspectors the right to visit the Arak facility, but argued that it was illegal because such agreements "cannot be modified unilaterally".

Israel's Shin Bet security agency on April 17 claimed it had exposed an Iranian plot to recruit as spies Israelis of Iranian origin visiting relatives in Iran, part of what it said was a spiralling Iranian intelligence operation against Israel. The affair highlighted an anomaly in the conflict between the countries.

Ahmadi-Nejad has repeatedly called for Israel to be "wiped off the map", and Israel accuses him of plotting its nuclear destruction - but Israeli Jews with family ties in Iran are still allowed to visit there. Israeli security officials told reporters that Shin Bet agents detained an Israeli returning from a visit to relatives among Iran's 25,000-strong Jewish community. He told interrogators he was given money by Iranian intelligence operatives and asked to help them spy on Israel.

The Associated Press said Shin Bet briefing documents it had obtained did not specify when the man was picked up, if he carried out the request or if he was released after questioning, but Israeli media reports said no charges had been brought. The documents said, however, that this was only one among several similar incidents. They said: "Over the past year Iranian intelligence has increased its activity against Israel. The Shin Bet has recently uncovered a number of attempts by Iranian intelligence to recruit Jews, Israeli citizens of Iranian descent, who went on family visits to Iran".