Why EU, Iran still far apart over nukes

"Hard-liners are very much in the ascendant, and voices for enrichment will be much stronger," says the diplomat. "They haven't started [actual] enrichment. They know that's the real red line, where you break off the diplomatic track for good."

But at the same time, Rafsanjani's unelected Expediency Council has in recent days been given sweeping new oversight powers, in an apparent bid by Iran's supreme religious leader, Ayatollah Ali Khamenei, to rein in hard-liners. In recent meetings with foreign diplomats, Rafsanjani has also explicitly stated that the supreme leader and the Expediency Council together - with no reference to the Ahmadinejad government - will "determine everything in the country."

And during Friday prayers in Tehran on Sept. 30, Rafsanjani carefully calibrated his words, describing the need for "diplomacy and not slogans," an indirect swipe at Ahmadinejad's tough speech at the UN just days earlier.

"Maybe we have overestimated the capacity of Rafsanjani to make a deal," says another European diplomat. "Nobody thought it would be easy, because there is consensus in this regime [on pursuing nuclear technology]. The difference between them is tactics."

Diplomats note that Rafsanjani used "all his weight," just before the election, to convince Ayatollah Khamenei not to permit the resumption of enrichment activities until after the vote, as hard-liners demanded.

Iran has since warned that it could reverse voluntary acceptance of the NPT Additional Protocol, which enables snap inspections. Or Iran could withdraw from the NPT altogether, heightening concern of a secret bomb program and risking a US or Israeli military response.

"It's not rational to tell Iran not to enrich uranium - it's our right," says Amir Mohebian, political editor of the conservative Resalat newspaper. Iran can prove its peaceful intention through greater transparency, he says, if the IAEA guarantees a supply of nuclear fuel for five years, while talks continue.

"We have spent huge money, $4 billion for enrichment, so we can't stop it," he adds.

But the resurgent military role has set off alarm bells. "I think it stands to reason that the one logical conclusion of the military involvement in a nuclear program is that they are trying to build a nuclear weapon," US State Department spokesman Sean McCormack said last week.

The European position also appears to have hardened since spring, when diplomats in Tehran spoke of a face-saving acceptance of Iran's right to nuclear technology by permitting a very limited, experimental enrichment project.

One document circulated between embassies in Tehran, with a section labeled "Compromise Solution" that permitted Iran a pilot project of a few hundred centrifuges. Iran wanted 5,000 centrifuges, which are central to a key method of uranium enrichment, for the project.

But European diplomats say that no such offer was ever put to the Iranians, and that "no enrichment at all" has been their constant message.

Iranians often point out the inconsistencies in their own neighborhood. Israel, Pakistan, and India are all nuclear weapons states, did not sign the NPT, and have been little punished for secretly building the bomb.

The US in July, in fact, agreed to a deal for extensive civilian nuclear cooperation with India. But, says one of the Western diplomats, "a regime that threatens to destroy Israel with the Shahab-3 [missile] can't have nuclear weapons. [W]e can't deal with Iran like we deal with India, which has proven to be a responsible nuclear weapons power."

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