U.S., other nations close to deal offering Iran economic incentives for suspending nuclear activities

VIENNA, Austria -- The United States and international partners are close to a deal that would offer Iran economic incentives if it suspends nuclear activities that could produce a bomb, Secretary of State Condoleezza Rice says.

Iran's foreign minister welcomed the idea of direct talks, but rebuffed the U.S. condition that Tehran first must suspend uranium enrichment.

"Iran welcomes dialogue under just conditions but" they won't give up their nuclear rights, the state-run Iranian television quoted Foreign Minister Manouchehr Mottaki as saying Thursday.

In announcing the overture to talk before flying from Washington to Vienna, where she arrived early Thursday, Rice said: "We are agreed with our European partners on the essential elements of a package containing both benefits, if Iran makes the right choice, and costs, if it does not."

Last chance

The shift in U.S. tactics was meant to offer the Iranians a last chance to avoid punishing sanctions. "We hope that in the coming days the Iranian government will thoroughly consider this proposal," Rice said.

Mottaki's statement issued at about the same time Rice was arriving in Austria was the country's first direct reaction to the U.S. offer.

"We won't negotiate about the Iranian nation's natural nuclear rights but we are prepared, within a defined, just framework and without any discrimination, to hold dialogue about" our common concerns, he said.

The package outlined Wednesday by Rice would be on the table for any new talks including the United States. Previous talks among Iran, Britain, France and Germany foundered last year. Iran insists its nuclear work is peaceful and aimed at developing a new energy source.

The U.S. shift came with pressure growing on the Bush administration from European allies and others to talk directly to Iran. It also came on the eve of a six-nation meeting in Vienna, Austria, focused on finishing the package and ending months of disagreement between the United States and Russia on how to persuade Iran to stop uranium enrichment, which can make fuel for nuclear power reactors or the fissile core of warheads.

The U.S. offer for talks is conditioned on Iran suspending its enrichment of uranium and related activities and allowing inspections to prove it. European nations and the Security Council have demanded the same thing, but Iran has refused to comply.

The foreign ministers or their equivalents of the United States, China, Russia, France and Britain -- the permanent Security Council nations -- plus Germany hoped to approve the incentives Thursday in Vienna. They also will consider tough council penalties, including possible sanctions, if Iran remains defiant.

Won't negotiate

Iran's oil minister said late Wednesday in Caracas, Venezuela, that his country won't negotiate on its nuclear research program with the United States, and he blamed the United States for pushing oil prices higher through threats against his government.

"We're never going to negotiate the cycle of nuclear fuel that we have been able to achieve with the efforts of our country's scientists," Sayed Kazem Vaziri Hamaneh told the Venezuela-based TV station Telesur, according to a partial transcript of his remarks.

In Tehran on Wednesday, the official Iranian news agency initially criticized the U.S. offer as "a propaganda move."

"It's evident that the Islamic Republic of Iran only accepts proposals and conditions that meet the interests of the nation and the country. Halting enrichment definitely doesn't meet such interests," IRNA said.

Iran did voluntarily suspend uranium enrichment activities before the European talks stalled, but resumed and stepped up its program this spring.

The resolution being considered in Vienna, as outlined to the AP by diplomats familiar with a draft version of the text, calls for imposing sanctions under the U.N. Charter. But it avoids any reference to a specific article of the charter that can trigger possible military action to enforce any such resolution.

The proposal also calls for new consultations among the five permanent Security Council members on any further steps against Iran. That is meant to dispel complaints by the Russians and Chinese that once the screws on Iran are tightened, the council would move automatically toward military involvement.

The possible sanctions include a visa ban on government officials, freezing assets, blocking financial transactions by government figures and those involved in the country's nuclear program, an arms embargo and a blockade on the shipping of refined oil products to Iran.

The Bush administration believes Russia and China would support sanctions or other harsh steps if new talks fail to persuade Iran to permanently abandon nuclear efforts, a senior administration official said. Rice will be working to reaffirm such support on Thursday.

The official briefed reporters on condition of anonymity because the secretary was continuing talks with other countries.

The United States has had no high-level, direct talks with the Iranians since the two countries cut diplomatic ties following the occupation of the U.S. Embassy in Tehran by radicals in 1979. U.S. officials have said direct talks could appear to legitimize a regime the United States believes supports terrorism.

Russia and China, as veto-holding members of the U.N. Security Council, have held up a U.S. drive to impose sanctions or other tough measures on Iran if it did not back down. Both are commercial partners of Iran.

On Wednesday, the U.N. ambassadors from China and Russia said in New York that the U.S. announcement showed it was more serious about finding a diplomatic solution to the dispute. Chinese Ambassador Wang Guangya added that the U.S. offer to talk to Iran should be unconditional.

Iran rejected a previous offer from France, Britain and Germany. The European trio broke off talks with Iran in August after Iran resumed activities linked to enrichment.