Reuters: France, Britain and Germany have toughened their stance on Iran's nuclear programme, demanding that Tehran halt all parts of the atomic fuel cycle that can be used to make  a bomb, Western diplomats said on Friday. Reuters

By Louis Charbonneau

VIENNA - France, Britain and Germany have toughened their stance on Iran's nuclear programme, demanding that Tehran halt all parts of the atomic fuel cycle that can be used to make a bomb, Western diplomats said on Friday.

Western diplomats said that unless Iran satisfies the European Union's "big three" and verifiably halts its uranium conversion and enrichment programmes, it would probably be reported to the U.N. Security Council for possible sanctions.

The United States accuses Iran of pursuing nuclear weapons under cover of a civilian power programme and has called on the Europeans to stop negotiating with Tehran and back a U.S. plan to report it to the Security Council for concealing potentially weapons-related nuclear activities for nearly two decades.

Iran denies pursuing atomic weapons, insisting its nuclear ambitions are limited to the peaceful generation of electricity.

Talks between Iranian officials and the U.N. nuclear watchdog ahead of Monday's key meeting at the agency's Vienna headquarters had produced no agreement by Friday afternoon and diplomats said it was unclear whether any would be reached.

"It's by no means certain that there will be a deal," a Western diplomat close to the IAEA told Reuters. He said that the IAEA and the EU trio had made their position clear and it was now up to the Iranians to say yes or no.

On Tuesday, diplomats said Iran had agreed in principle to suspend its uranium enrichment programme -- a suspension it had promised in October 2003. The major sticking point now is Iran's refusal to accept EU demands that it abandon uranium conversion.

"Iran says that uranium conversion was never part of the original suspension agreement," a diplomat in Vienna said.

One diplomat said hawkish U.S. Under Secretary of State John Bolton would discuss Iran with his three EU counterparts on the sidelines of the G8 meeting in Geneva, Switzerland.

IRAN'S DEMANDS

The EU trio hope to submit a resolution to the IAEA board meeting next week that stops short of reporting Iran to the Security Council for violating the nuclear Non-Proliferation Treaty. But they are waiting for Iran's response on the suspension before circulating anything, diplomats said.

One diplomat said Iran had made agreement to the European terms for suspending its fuel cycle activities conditional "upon the inclusion of certain language in the resolution". It was unclear what that language would be.

Two diplomats said the EU big three and IAEA chief Mohamed ElBaradei wanted Tehran to pledge formally to abandon all activities that could lead to the production of bomb-grade nuclear material. They said this would include the conversion of uranium into feed material for centrifuges.

"They (the EU trio) are quite firm on this. It's not possible to say you are suspending enrichment while continuing to convert uranium," a Western diplomat on the IAEA's 35-member board told Reuters on condition of anonymity.

Iran recently announced plans to convert 37 tonnes of milled "yellowcake" uranium into uranium hexafluoride (UF6), the feed material for centrifuges used to purify uranium for use as fuel in atomic power plants or in weapons. This announcement was harshly condemned by European and U.S. officials.

Experts say the amount of UF6 obtained from this process could theoretically be enriched into fuel for one to five bombs

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