IAEA's Olli Heinonen (l) and Javad Vaeedi, an Iranian negotiator spoke to media last week.
Morteza Nikoubazl/Reuters
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US and Iran spar ahead of Iraq report

The US says it is worried about Iranian support for insurgents in Iraq. Separately, the IAEA reported that Iran's progress on nuclear enrichment is slow.

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Reporter Scott Peterson highlights the latest fiery exchanges between Iran and the US, in part concerning the Iraq war.

American and Iranian leaders are boosting their belligerent rhetoric, even as the UN's nuclear watchdog reported Thursday that Iran's nuclear program is moving slower than expected and below capacity.

In results likely to blunt US efforts to further sanction Iran, the Vienna-based International Atomic Energy Agency (IAEA) said Iran's expanding efforts still defy Security Council resolutions, but that cooperation in clearing up continued suspicions marked "a significant step forward."

In the war of words that escalated this week, President George Bush charged on Tuesday that Iran's pursuit of nuclear technology put the Mideast "under the shadow of a nuclear holocaust."

Pressures are mounting on all sides. Washington awaits a key US progress report on Iraq, where American accusations of Iranian support for anti-US militias has sharpened. And the IAEA this week unveiled a deal with Iran to "resolve" all outstanding questions by year's end, a deal that analysts say risks ending investigations too early.

"Iran is now facing a litmus test to provide answers in a timely manner to our questions," the IAEA deputy head Olli Heinonen said in Vienna. "If the answers [from Iran] are not satisfactory, we are making new questions until we are satisfied with the answers."

The top US commander in Iraq, Gen. David Petraeus and US Ambassador Ryan Crocker are to give assessments on the effect of a months-long surge in Baghdad the second week of September that will shape future US deployments and withdrawal plans for Iraq.

"The US is seriously concerned about Iranian support for violence in Iraq that has killed American soldiers, and as we get close to the date of the Petraeus report, the Iran factor looms large," says Mark Fitzpatrick, an Iran expert at the International Institute of Strategic Studies in London. "It's natural that President Bush would point to that external factor as a reason not to cut and run from Iraq."

Using his strongest public language on Iran to date, President Bush on Tuesday repeated charges that Iran is causing US deaths in Iraq by supporting and supplying weaponry to Shiite militias and said he ordered US commanders to "confront Tehran's murderous activities."

Iranian spokesmen this week again denied supporting anti-US actions in Iraq and, in Vienna, warned the US and West against pushing for a third round of Security Council sanctions.

Speaking Tuesday in Tehran just hours before Bush, Iranian President Mahmoud Ahmadinejad dismissed the US as an empire in decline, with failure in Iraq leaving a "huge power vacuum" that Iran was ready to fill.

"The political power of the occupiers is collapsing rapidly," said Mr. Ahmadinejad. "Occupation is the root of all problems in Iraq. It has become clear that occupiers are not able to resolve regional issues."

Iranian Foreign Minister Manouchehr Mottaki on Thursday dismissed US claims that Iran is interfering in Iraq as lacking evidence, saying that Bush's statements "are a sign of indecision, lack of wisdom, and political despair."

A separate draft report by the Government Accountability Office, described Thursday as "strikingly negative" by The Washington Post, which acquired the document, found that only three of 18 benchmarks mandated by Congress had been met in Iraq.

The arrest of seven Iranians and their Iraqi guards at the Sheraton hotel in Baghdad this week – with television footage showing them blindfolded and being led out of the hotel by US soldiers – threatened a further deterioration, akin to the arrest of five Iranians in northern Iraq in January, who remain in custody. They were released next morning, with an adviser to General Petraeus expressing "regret" after it became known the group were on official business.

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