Iran is to hold talks at the International Atomic Energy Agency (IAEA) on a proposal for Russia and France to enrich fuel for a research reactor. This would require Iran to hand over the uranium which many western nations say is being built up to develop a nuclear bomb.

But before the talks with France, Russia, the United States and IAEA officials, Iran said it would carry on enriching uranium no matter what happens in Vienna.

Iran Atomic Energy Organisation spokesman Ali Shirzadian said the country will keep on enriching uranium up to the five percent level, the official IRNA news agency reported.

"But if the negotiations do not yield the desired results, Iran will start enriching uranium to the 20 percent level for its Tehran reactor. It will never give up this right," the spokesman added.

Shirzadian said the third-party enrichment deal was a "test" for world powers. "This issue is a test for the Western powers to show how honest they are in their commitments," he said.

IAEA chief Mohamed ElBaradei was expected to open the meeting, after which the agency's deputy director general for external relations and policy coordination, Vilmos Cserveny, would take the reins.

The exact line-up was not yet clear, but the US delegation was to be headed by Deputy Energy Secretary Dan Poneman and would include Washington's envoy to the IAEA, Glyn Davies.

France's IAEA ambassador Florence Mangin would head her country's delegation.

The Iranian delegation would be headed by the Islamic regime's ambassdor to the IAEA, Ali Asghar Soltanieh.

The talks, to begin at 3:00 pm (1300 GMT) and which could run to Tuesday or Wednesday, are the latest attempt by the international powers to restrict Iran's nuclear drive. The UN Security Council has already imposed three rounds of sanctions on Iran for refusing to stop its enrichment.

Britain, China, France, Germany, Russia and the United States have led the talks with Iran.

Western powers have threatened to move for more sanctions unless Iran falls in line with UN resolutions. Iran has denied it is trying to build a bomb and China and Russia have spoken against new sanctions, though analysts said both could be more ready to make concessions.

The Vienna talks will discuss a plan put forward this month under which Iran will allow Russia and France to further enrich its uranium to levels required to fuel a research reactor in Tehran which makes isotopes for medical uses such as cancer treatment.

Enriched uranium can be used as fuel for a nuclear reactor or, in much purer form, as the fissile core of an atomic bomb.

Iran has so far amassed around 1,500 kilogrammes of low-enriched uranium at its plant in Natanz, in spite of UN calls to halt the work until the IAEA can determine that the activities are entirely peaceful as Tehran claims.

But Iran needs medium-enriched uranium to run the research reactor and the fuel for that reactor is running low.

Iran agreed during talks in Geneva on October 1 to consider sending low-enriched uranium abroad for further purification and subsequent return to Iran.

Diplomats have described the proposal as a "win-win" solution: the Iranians would get the fuel they needed, while at the same time, Western fears would be allayed that the material could be used to make a bomb.

related report
China could bend on Iran nuclear sanctions: experts
China has repeatedly said it opposes sanctions against Iran over its nuclear programme, but Beijing could make concessions to protect its wider interests, especially in terms of Sino-US ties, experts say.

Of the six major world powers working to defuse the standoff with Tehran, Beijing and Moscow have so far formed a united front, rejecting sanctions and pushing for further negotiations despite intensifying pressure from Washington.

Their commercial interests could be a factor in their decision-making, experts say -- China and Russia are the two countries with the biggest stakes in Iran's natural gas sector.

Iran also is the number three source of crude oil for energy-hungry China, and trade between the two countries has exploded in recent years, amounting to 28 billion dollars in 2008, according to official figures.

While US Secretary of State Hillary Clinton unsuccessfully tried to persuade Russia to support new sanctions against the Islamic republic during a visit to Moscow last week, one of her deputies was here trying to win Beijing's support.

"If we are to make real progress on sending a consolidated message to Iran, we are going to need the support of China," US Assistant Secretary of State Kurt Campbell told reporters.

Xu Tiebing, a professor of international relations at Communication University of China, said Beijing would not support new sanctions "as long as there is not sufficient evidence showing that Iran is using its technology to develop weapons."

But, despite its protestations, China has supported three previous UN Security Council resolutions on Iran's contested atomic programme.

And experts say it could further soften its position, even though nearly 14 percent of China's oil imports come from Iran and several Chinese firms are in line to secure lucrative gas contracts there, notably in the South Pars field.

Iran's vice oil minister Hossein Noqrehkar-Shirazi has said Chinese firms are ready to invest 48-50 billion dollars in oil and gas ventures, but Beijing has not signed any major contracts yet.

"The Chinese do not understand what the Iranians want to do," said Michal Meidan, a researcher at the Paris-based Asia Centre.

"They are not going to pour money into the country before seeing what happens with the sanctions," she said, adding that Beijing would be hard-pressed to vote against UN sanctions and calling a veto "unthinkable."

China's burgeoning ties with Iran, compared with its political and economic links to Washington, still carry very little weight, Meidan said.

A vote by Beijing in Tehran's favour within the UN "would run counter to many of its interests with the United States and Europe, and Iran in the end is not really one of its major partners," she said.

"In the worst case scenario, the Chinese would abstain... but I think what they will try to do is modify the text of an eventual resolution and make the most of the negotiations before any discussions (on a resolution)."

"Of course, this will all depend on what the Russians do," Meidan added.

The five veto-wielding permanent members of the UN Security Council -- Britain, China, France, Russia and the United States -- plus Germany are currently in talks with Iran in a bid to end the standoff.

Samuel Ciszuk, an analyst at IHS Global Insight, agreed that China was unlikely to use its veto but would instead try to "water down" any UN text targeting Tehran.

"Looking over the last few years, China has not stuck up for Iran," Ciszuk said.

"China needs energy but they also need the market for their products in the West," he added. "There is a lot of interest in keeping relations with the developed economies on a good footing."

He said Chinese firms such as state-owned energy giants CNPC, CNOOC and Sinopec were the "only players in the starting blocks" in Iran and had been "clever in moving in where Western companies previously had a stake."

"It is not just South Pars -- it is South Azadegan, it is North Pars," Ciszuk said, while noting the companies "haven't really started investing money... they are almost as careful as Western companies."

As for the possibility raised in Washington of sanctions on fuel deliveries to Iran, experts say the impact of such a move would be minimal for China, as the transactions were mainly spot contracts.

Meidan said the 30,000-40,000 barrels a day at stake, according to a Financial Times report, "would only mildly affect Chinese traders."

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