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Iran's nuclear program: will more sanctions work?

The EU's Javier Solana heads to Iran this weekend to offer revised US-EU incentives.

By Staff writer of The Christian Science Monitor / June 13, 2008

Two sides: President Ahmadinejad was defiant Wednesday about Iran's nuclear program. EU foreign policy chief Javier Solana goes to Iran this weekend for talks.

Saman Aghvami/AP

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Istanbul, Turkey

European foreign policy chief Javier Solana is due in Iran this weekend to peddle a revised package of European Union and American incentives aimed at convincing Iran to rein in its nuclear ambitions.

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On offer are promises of ending Iran's isolation, boosting trade ties, and assisting a peaceful nuclear power effort. But Iran dismissed a similar offer in 2006 and has all but rejected this one, which, as a precondition, requires Iran to first give up enriching uranium – a process that can make nuclear fuel or material for bombs.

Not on the list of incentives is a security guarantee from the United States that it won't attack, despite growing speculation mixed with shrill rhetoric that the US or Israel might strike Iran's nuclear facilities in coming months.

Along with the EU-US carrot, sticks under consideration include tougher sanctions against Iran. But sanctions as a tool have had mixed success globally in recent decades. And analysts say record oil prices give Iran an advantage, even enabling a "counter-sanction" against the West by limiting oil production to further drive up prices.

"So long as we are selling the oil, nothing will work" to force Iran to give up its nuclear efforts, says a senior Iranian banker interviewed recently in Tehran, who asked not to be named.

"We could survive in this country with $15 billion per year, and now we're making $100 billion, $90 billion," says the banker, whose operational costs have "increased tremendously" under current sanctions, though his bank is not a target. "There is no way we should give in under pressure."

That economic gusher has helped President Mahmoud Ahmadinejad mask an array of problems, from overspending and inflation near 25 percent to high unemployment. Strategically, it has also enabled Iran to lock in its anti-Western and anti-Israel stance, even while 160,000 US troops are in neighboring Iraq and Afghanistan.

"In the past two, three years, they employed all their might, resorted to propaganda … and sanctions," Mr. Ahmadinejad said in a speech on Wednesday. "If the enemy thinks they can break the Iranian nation with pressure, they are wrong…. Today, they know their plans have failed."

How to deal with Iran topped the agenda in Europe during President Bush's farewell visit this week for an EU-US summit. He said his "first choice" was to solve the Iran-US standoff diplomatically, though "all options are on the table."

He said a nuclear-armed Iran "would be incredibly dangerous for world peace" and warned Iran of new sanctions "if you continue to deny the just demands of a free world." Bush won more EU support for sanctions.

Israeli officials sounded their own alarms, with cabinet minister and former military chief Shaul Mofaz telling Yediot Aharanot newspaper a week ago that "the window of opportunity has closed. The sanctions are not effective. There will be no choice but to attack Iran to stop its nuclear program."

The government and pundits quickly downplayed the comments of a likely challenger to Prime Minister Ehud Olmert, which caused a 9 percent spike in the price of oil. But such comments are focusing attention on what impact, if any, sanctions might have.

Iran is already subject to three sets of UN sanctions and a Security Council resolution demanding that it stop enriching uranium. The Islamic Republic is also the target of a growing number of US sanctions, the first imposed 25 years ago.