Iran claims major steps in nuclear fuel

TEHRAN, Iran -- Iran said Wednesday it is dramatically closer to mastering the production of nuclear fuel even as the U.S. weighs tougher pressures and Tehran's suspected shadow war with Israel brings probes far beyond the Middle East.

Iran further struck back at the West by indicating it was on the verge of imposing a midwinter fuel squeeze to Europe in retaliation for a looming boycott of Iranian oil but denied reports earlier in the day that six nations had already been cut off.

The messages from Iran, however, came with a counterpoint. The official IRNA news agency said Iran's top nuclear negotiator, Saeed Jalili, told European Union foreign policy chief Catherine Ashton that Iran is ready to return to talks with the U.S. and other world powers.

The dual strategy -- taking nuclear steps while proposing more talks -- has become a hallmark of Iran's dealings for years, and some critics have dismissed it as a time-buying tactic.

In a live TV broadcast, President Mahmoud Ahmadinejad was shown overseeing what was described as the first Iranian-made fuel rod inserted into a research reactor in northern Tehran. Separately, the semiofficial Fars agency reported that a "new generation" of Iranian centrifuges -- used to enrich uranium toward nuclear fuel -- had gone into operation at the country's main enrichment facility at Natanz in central Iran.

In Washington, the assistant secretary of state for International Security and Nonproliferation, Tom Countryman, dismissed the Iranian claims of reaching a pivotal moment. "The announcement today by Iran has much more to do with political developments in Iran than it has to do with factual developments," he said.

White House press secretary Jay Carney said Iran's "defiant acts" seek to "distract attention" from the damage brought by international sanctions.

Meanwhile, Iran is accused of bringing an apparent covert conflict with Israel to points stretching from Thailand and India to the former Soviet republic of Georgia.

Officials in Israel ramped up allegations that Iran was linked to international bomb plots, saying magnetic "sticky" bombs found in a Bangkok house rented by Iranians were similar to devices used against Israeli envoys in a foiled attack in Georgia on Monday and a blast in New Delhi that injured four people, including a diplomat's wife.

"In recent days, Iran's terror operations are being laid bare for all," said Israeli Prime Minister Benjamin Netanyahu, who convened his security cabinet. It included discussions about "preventive measures" against Iranian threats, said a statement from Netanyahu's office that did not elaborate.

Iran's Foreign Ministry spokesman, Ramin Mehmanparast, called the allegations "baseless" and an attempt to push "conspiracy" theories to discredit Iran with its Asian partners, including major oil buyer India.

Iran, in turn, accused Israel of being behind clandestine attacks that have claimed the lives of at least five members of Iran's scientific community in the past two years, including a "sticky" bomb blast that killed a director at the Natanz labs last month.

Framed photos of the five scientists were shown by Iranian TV before a speech by Ahmadinejad, who was flanked by the flags of Iran and the country's nuclear agency.

He repeated Iran's goal of becoming a technological beacon for the Islamic world and insisted that scientific progress is the right of all nations. Here rests one of the biggest dilemmas for the West. Iran has merged the nuclear program with its national identity and is unlikely to make any concessions without huge incentives.

"I hope we reach the point where we will be able to meet all our nuclear needs inside the country so we won't need to extend our hand before others, specifically before the world's dastardly people," Ahmadinejad said. "For a gentleman, for a chivalrous nation, the most difficult moment is when he has a need to ask (for something) from a dastardly person."

Iran also used the announcements as a carefully crafted show of unity.

The families of the slain scientists attended the ceremonies. State TV showed the father of the scientist killed last month, Mostafa Ahmadi Roshan, clicking on the computer to inaugurate the advanced centrifuges inside the Natanz facility. TV showed tears in the eyes of Roshan's mother and wife when the father opened the project.

Ahmadinejad put the young daughter of slain electronics student Darioush Rezaeinejad on his knee and patted her long hair.

The purported new frontiers for Iran's atomic program showcase what could be significant steps at becoming self-sufficient in creating nuclear fuel -- the centerpiece of the dispute with the U.S. and its allies.

In the fuel cycle, mined uranium is processed into gas, then that gas is spun in centrifuges to purify it. Low-enriched uranium -- at around 3.5 percent -- is used to produce fuel rods that power a reactor. But the same process can be used to produce highly enriched uranium -- at around 90 percent purity -- that can be used to build a warhead.

Iran claims it only seeks reactors for energy and medical research.

The Tehran facility where IRNA said the new fuel rods were installed is intended to produce isotopes for cancer treatments. It requires fuel enriched to around 20 percent, considered a threshold between low- and high-enriched uranium.

Iran began enriching up to near 20 percent in February 2010 after attempts at a deal with the West to import the fuel rods broke down.

Iranian officials have long spoken of introducing faster, more efficient centrifuges at the Natanz facility. The Fars report did not give further details, but Iran also says it also has sophisticated centrifuges in a new site built into a mountainside south of Tehran and possibly impervious to airstrikes.

A diplomat accredited to the International Atomic Energy Agency, which monitors Iran's known nuclear programs said the "new generation" of centrifuges appeared to be referring to about 65 IR-4 machines that were recently set up at an experimental site at Natanz. The new model can churn out enriched material at a faster rate than the more rudimentary IR-1 centrifuges, thousands of which are at work in Natanz producing low-enriched uranium, said the diplomat, who spoke on condition of anonymity because the information is privileged.

In still another development, the head of Iran's Atomic Energy Organization, Mohammad Abbasi, was quoted as saying Iran will open a new facility to produce "yellowcake," which is concentrated natural uranium and is the foundation material in the process to make nuclear fuel. In the past, Iran has purchased most of its yellowcake abroad, including South Africa and China.

The U.S. and EU have tried to rein in Iran's nuclear program with new boycotts and banking restrictions targeting Iran's crucial oil exports, which accounts for about 80 percent of the country's foreign revenue.

The Obama administration is now weighing an even harsher blow: possibly seeking Iran's removal from SWIFT, an independent financial clearinghouse that is crucial to the country's overseas oil sales. But such a move could push oil prices higher and undercut fragile Western economies.

Iran pushed back at Europe.

State TV quoted Foreign Ministry official Hasan Tajik as saying that six European diplomats were summoned Wednesday and told that Iran has no problem replacing customers -- an implied warning that Tehran would carry out plans to cut off EU countries immediately to pre-empt sanctions set to go into effect in July.

Conflicting information about the cutoff has been relayed by Iranian media throughout the day: first the full blockade on six countries, then a report carried by the semiofficial Mehr agency saying that exports were cut to France and the Netherlands with four other European countries receiving ultimatums to sign long-term contracts with Iran.

Iranian officials say an immediate cutoff will hit European nations before they can line up new suppliers, and that Tehran has already found buyers for the 18 percent share of its oil that goes to Europe.

In Vienna, Russian Foreign Minister Sergey Lavrov criticized the U.S. and the EU for instituting "one-sided sanctions" on Tehran that "erode unified action against Iran's nuclear program."

At the same time, he said the suspicion -- nurtured by years of Iranian secrecy -- that Tehran is covertly working on a nuclear arms program "must be clarified without any doubt."

In Bangkok, Thai officials held three Iranians rounded up after a cache of explosives detonated accidentally in their home. Bomb disposal teams combed the damaged house while security forces sought an Iranian woman they said had originally rented it.

Thai authorities have not disclosed any potential targets for the explosives.

Israeli defense officials, however, believe the Iranian men were plotting to attack the Israeli ambassador in Thailand, Israel's Channel 10 TV reported. It said the investigation was still ongoing and its conclusions were not final.

In a reflection of how the attacks caught Israel off guard, the Israeli Counter Terrorism Bureau last month lifted a travel warning to Bangkok after Thai authorities arrested a suspect with alleged links to Hezbollah. The warning was issued Jan. 13 and lifted less than two weeks later.

The bureau lifted a similar travel advisory for Israelis going to Georgia in November.

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Murphy reported from Dubai, United Arab Emirates. Associated Press writers Josef Federman in Jerusalem, George Jahn in Vienna and Thanyarat Doksone and Todd Pitman in Bangkok contributed to this report.