The proposal was seen as a means of assuring the world that the process would not produce materials that could be used to make nuclear weapons. Uranium enriched to a low degree is used as fuel for nuclear reactors. But highly enriched uranium is suitable for making atomic bombs.

Iran insists that it only wants to use nuclear research to build reactors for generating electricity. The United States and some of its allies contend Tehran is trying to build an atomic weapon.

Despite the threat, Iran on Sunday indicated it remained ready for talks on the Russian proposal.

"The situation has changed. Still, we will attend talks with Russia on February 16," Foreign Ministry spokesman Hamid Reza Asefi told a press conference.

"The proposal has to conform itself with the new circumstances," Asefi said. "If the Russian proposal makes itself compatible with the new conditions, it can be negotiated."

His comments came a day after Javad Vaeidi, deputy head of the powerful National Security Council, said there was there was "no adequate reason to pursue the Russian plan."

It was not clear if the change of course represented a major shift in Iran's strategy in the crisis over its nuclear activities. Asefi said "the door for negotiations is still open" over Iran's nuclear program.

"We don't fear the Security Council. It's not the end of the world," he said.

Asefi issued his comments after Foreign Minister Manouchehr Mottaki announced that Iran had ended all voluntary co-operation with the IAEA, acting on the order a day earlier of President Mahmoud Ahmadinejad. The action was required as a response to the IAEA move by a law passed last year.

"We have ended all the voluntary co-operation we have been extending to the IAEA in the past two-a-half to three years, on the basis of the president's order," Mottaki said. "We do not have any obligation toward the additional protocol (anymore)."

The announcement means Iran has resumed uranium enrichment and will no longer allow snap IAEA inspections of its nuclear facilities, both voluntary measures it had allowed in recent years in a goodwill gesture to build trust under a protocol to the Nuclear Non-proliferation Treaty.

Iran has repeatedly stressed that it would continue to honour its commitments under the treaty but that it has the right to pursue a peaceful nuclear program.

"Adoption of the policy of resistance doesn't mean we are on non-speaking terms or nonco-operative," Mottaki said. "Yesterday we had two options. One was the option of resistance and the other was surrender. We chose resistance."

"Our activities will continue within the NPT (and not beyond that)," he told a press conference. "We have withdrawn only the possibility of voluntary co-operation from them (IAEA and the West)."

Mottaki said the IAEA resolution was "the result of a political will based on U.S. hostility" toward Iran.

He said Iran would defend its right to possess nuclear technology and enrich uranium to produce nuclear fuel. "We will continue this path," he told reporters.

Meanwhile Sunday, Ahmadinejad continued his defiance against the IAEA vote.

"You (the West) can't do a thing. The era of coercion and domination has ended," Ahmadinejad was quoted as saying by the official Islamic Republic News Agency.

"Issue as many resolutions like this as you want and make yourself happy. You can't prevent the progress of the Iranian nation," he said.

"In the name of the IAEA they want to visit all our nuclear facilities and learn our defence capabilities, but we won't allow them to do this," Ahmadinejad said Sunday.

The IAEA resolution requests Director General Mohamed ElBaradei to "report to the Security Council" with steps Iran needs to take to dispel suspicions about its nuclear ambitions.

These include that it return to freezing uranium enrichment; consider stopping construction of a heavy-water reactor that could be the source of plutonium; formally ratify the agreement allowing the IAEA greater inspecting authority and give the nuclear watchdog more power in its investigation of Iran's nuclear program.

Tensions were likely to rise as Iran rejects pressure from the outside. It began to escalate last month after Iran removed UN seals and began nuclear research including small-scale uranium enrichment.

That came after months of futile talks between Iran and Britain, Germany and France, which negotiated on behalf of the 25-country European Union.

The man in charge of hoodwinking the Western powers about Iran's now 18-year-old secret nuclear program believes the apocalypse will happen in his own lifetime. He'll be 50 in October.

President Mahmoud Ahmadinejad's Shi'ite creed has convinced him lesser mortals can not only influence but hasten the awaited return of the 12th Imam, known as the Mahdi. Iran's dominant "Twelver" sect holds this will be Muhammad ibn Hasan, the righteous descendant of the Prophet Muhammad. He is said to have gone into "occlusion" in the 9th century, at age 5. His return will be preceded by cosmic chaos, war, bloodshed and pestilence. After this cataclysmic confrontation between the forces of good and evil, the Mahdi will lead the world to an era of universal peace.

"The ultimate promise of all Divine religions," says Ahmadinejad, "will be fulfilled with the emergence of a perfect human being [the 12th Imam], who is heir to all prophets. He will lead the world to justice and absolute peace. Oh mighty Lord, I pray to you to hasten the emergence of your last repository, the promised one." He reckons the return of the Imam, AWOL for 11 centuries, is only two years away.

Mr. Ahmadinejad is close to the messianic Hojjatieh Society, which is governed by the conviction the 12th Imam's return will be hastened by "the creation of chaos on Earth." He has fired Iran's most experienced diplomats and scores of other officials, presumably those who don't share his belief in apocalyptic conflagration.

The Iranian leader's finger on a nuclear trigger would be disquieting under any circumstances. Positively alarming would be a nuclear weapon in the hands of a man who badgers Israel, the U.S. and the European Union in belief a pre-emptive aerial attack on Iran's nuclear facilities will hasten the return of the missing Mahdi. Such an attack presumably would trigger anti-Western mayhem throughout the Middle East.

When he became Iran's sixth president since the 1979 revolution last summer, Mr. Ahmadinejad decided to donate $20 million to the Jamkaran mosque, a popular pilgrimage site where the faithful can drop their missives to the "Hidden Imam" in a holy well. Tehran's working-class faithful are convinced the new president and his Cabinet signed a "compact" pledging themselves to precipitate the return of the Mahdi -- and dropped it down Jamkaran's well with the Mahdi's zip code.

In Mr. Ahmadinejad's eyes, Iran is strong, with oil inching up to $70 a barrel and America, dependent on foreign oil, is weak. He has said publicly America and Europe have far more to lose than Iran if the U.N. Security Council votes for tough economic sanctions. He also figures if Israeli and/or U.S. warplanes strike Iran, all he has to do is give the U.S. a hard time in Iraq as American forces prepare to withdraw.

Moving two or three Iranian divisions into Iraq and activating Shi'ite suicide bombers and hit squads throughout the region would not be too hard for a country that fought an 8-year war against Iraq (1980-88) and had no compunction about giving thousands of youngsters a key to paradise and 72 virgins before sending them across Iraqi minefields.

A top Ahmadinejad officer, Brig. Gen. Mohammad Kossari, who heads the political watchdog, or Security Bureau, of Iran's armed forces, recently taunted the U.S. when he bragged "we have identified all the weak points of our enemies" and have sufficient cannon fodder -- i.e., suicide operation volunteers -- "ready to strike at these sensitive locations." Iranian television recently broadcast an animated film for Iranian children glorifying suicide bombers.

So far, Supreme Leader and Chief of State Ayatollah Ali Khamenei, who sits in the holy city of Qom, has not expostulated. Mr. Ahmadinejad appears to have his religious rear well covered. His ideological mentor and spiritual guide is Ayatollah Mesbah Yazdi who heads the ultraconservative acolytes who believe the 12th Imam's return is "imminent."

The son of a blacksmith, Mr. Ahmadinejad earned an engineering Ph.D. and is a former member of Iran's notorious Revolutionary Guards at a time when dissidents and "counterrevolutionaries" were executed by the thousands.

A.Q. Khan, father of Pakistan's nuclear arsenal, first showed Iran how to build a nuclear weapon 18 years ago. He opened his nuclear black market to Iranian engineers and scientists.

The Bush administration is anxious to clear the decks in a democratic Iraq before facing the Islamist counterpart of the "Rapture" in the "Left Behind" series of books on the end of times by Tim LaHaye and Jerry B. Jenkins.

President Bush says all options are on the table. But the military option is probably the one the "twelvers" would look forward to. Some Washington think tank strategists argue if Iran's Dr. Strangelove attacked Israel with a nuclear weapon, five Iranian cities would be vaporized next day.

It might behoove the United States to sit down with "axis of evil" Iran to find out if the MAD (Mutually Assured Destruction) doctrine that kept the Soviet Union and the U.S. at peace for a half-century could still be made to work.

In any event, one would have to be irredeemably myopic not to see that Iran has an active nuclear weapons program. The only question is how far this secret program is from delivering a usable weapon and fitting it in the nose cone of a Shahab-3 missile with the range to reach Israel. The Israeli Air Force will be "overhead" Iran long before.

President Mahmoud Ahmadinejad had ordered the move Saturday in response to the U.N. agency decision to refer Iran to the Security Council over fears the country is trying to develop a nuclear bomb. It means Iran will resume uranium enrichment and will no longer allow snap IAEA inspections of its nuclear facilities — voluntary measures it had allowed in recent years in a gesture to build trust.

"We ended all the voluntary cooperation we have been extending to the IAEA in the past two-and-a-half to three years, on the basis of the president's order," Mottaki said. "We do not have any obligation toward the additional protocol (anymore)."

The action was required under a law passed last year.

Iran has repeatedly stressed that it will continue to honor its commitments under the Nuclear Nonproliferation Treaty but that it has the right to pursue a peaceful nuclear program.

"Adoption of the policy of resistance doesn't mean we are on non-speaking terms or noncooperative," Mottaki said. "Yesterday we had two options. One was the option of resistance and the other was surrender. We chose resistance."

Open to Negotiations

Earlier, Foreign Ministry spokesman Hamid Reza Asefi said Iran was open to negotiations on a Moscow's proposal that Iran shift its plan for large-scale enrichment of uranium to Russian territory. The plan is intended to allay world suspicions that Iran might use the process to develop a nuclear bomb.

Uranium enriched to a low degree is used as fuel for nuclear reactors. But highly enriched uranium is suitable for making atomic bombs.

"The situation has changed. Still, we will attend talks with Russia on February 16," Foreign Ministry spokesman Hamid Reza Asefi said at a press conference.

"The proposal has to conform itself with the new circumstances," he added. "If the Russian proposal makes itself compatible with the new conditions, it can be negotiated."

His comments came a day after Javad Vaeidi, deputy head of the powerful National Security Council, said there was there was "no adequate reason to pursue the Russian plan."

It was not clear if the change of course represented a major shift in Iran's strategy in the crisis over its nuclear activities. Asefi said "the door for negotiations is still open" over Iran's nuclear program.

"We don't fear the Security Council. It's not the end of the world," he added.

"The proposal has to conform itself with the new circumstances," Asefi said. "If the Russian proposal makes itself compatible with the new conditions, it can be negotiated."

Iran has said the Russian proposal has ambiguities that need to be clarified in talks. Iranian officials have also said Tehran would reject the proposal if it sought to prevent Iran from enriching uranium inside the country. They insist it must only be a complementary measure to Iran's nuclear program.

IAEA Referral Rejected

Earlier Sunday, Ahmadinejad brushed off the IAEA referral.

"Issue as many resolutions like this as you want and make yourself happy. You can't prevent the progress of the Iranian nation," he said in comments carried by the official Islamic Republic News Agency.

"In the name of the IAEA they want to visit all our nuclear facilities and learn our defense capabilities, but we won't allow them to do this," he added.

Asefi reiterated that Iran would cooperate with the IAEA within the framework of the NPT and the Safeguard Agreement.

"We chose our way wisely. We have solutions for all situations that may develop. Referring Iran to the Security Council will definitely harm the other party more than Iran," Asefi said.

Twenty-seven of 35 member nations on the IAEA board voted for Iran's referral, reflecting more than two years of intense lobbying by the United States and its allies to enlist broad backing for such a move. Cuba, Venezuela and Syria voted against, and five members abstained.

After years of opposition, Russia and China backed the referral last week, bringing support from other nations who had been waiting for their lead.

But in return, Moscow and Beijing demanded that the Americans — and France and Britain, the two other veto-wielding Security Council members — agree to let the Iran issue rest until at least March, when the IAEA board meets again to review the agency's investigation of Iran's nuclear program and its compliance with board demands that it renounce uranium enrichment.

He said with the current circumstances, the western threats over "our nuclear file will not materialize." The International Atomic Energy Agency's (IAEA) board of governors had agreed earlier today to refer Iran's nuclear file to the UN Security Council (UNSC).

Zadeh said the US and other Western countries "don't have the ability to take decisions in the Middle East.

"The Iranian supremecy in the region cannot be denied, and any threat or pressure on Iran will make the west receive a severe hit in Afghanistan and Iraq," he added.

He said Iran was cooperating with IAEA to have its rights to use nuclear technology for peaceful purposes.

Right now, the NYMEX and IPE use three oil "markers" to establish price – West Texas Intermediate crude, Norway Brent crude and the UAE Dubai crude. With the establishment of an Iranian Oil Bourse, Tehran wants to create a fourth oil marker, this one priced in the euro.

In 2000, as Saddam Hussein continued to sell the United Nations on what became the "oil for food" scandal, Iraq received U.N. permission to sell Iraqi oil for euros, not dollars. Saddam even received permission from the U.N. to convert the $10 billion oil-for-food reserve fund from dollars to euros.

Many administration critics argue today that the real reason for invading Iraq in 2003 was not to remove WMD from Iraq or to establish freedom but to preserve the dollar dominance of the world's oil market. These same critics argue today that the real reason for the ramp-up of concern over Iran has nothing to do with Iran's secret nuclear weapons program or with President Ahmadinejad's threats to destroy Israel but everything to do with oil.

If the Iranians persist in creating a market mechanism to settle world oil transactions in the euro, the United States will attack just to preserve the oil market for the dollar.

Today, about 70 percent of the world's international foreign currency reserves are held in dollars. If the petroeuro begins to challenge the petrodollar, this percentage could diminish drastically.

The United States depends on the dollar foreign-currency reserves in order to sell the Treasury debt that sustains budget deficits. What if foreign-exchange portfolios from oil sales fell to 60 percent being held in dollars – would that cause a crisis in the U.S. economy? Or would it take 55 percent? Most Americans are completely unaware of this threat Iran represents to the U.S. economy.

The Iranians, however, are fully aware of what they are threatening, and so are top economic experts within the administration.

The Islamic world also has realized that America is at risk because we no longer have a gold-backed currency. For years, former Malaysian Prime Minister Mahathir Mohamad has championed a move for the Muslim nations of the world to establish the gold dinar as the standard currency for settling international oil transactions. In November 2002, the West Malaysian Royal Mint reissued the gold dinar that was in common use in the Muslim world during the Ottoman Empire.

The idea would be to challenge the dollar by arguing that a fixed-value currency backed in gold is more resistant to devaluation than a floating dollar such as the U.S. has had since the administration of Richard Nixon.

In writing "Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil," Craig Smith and I argued that the United States should seriously consider establishing a gold-backed international-trade dollar to preserve stability and value in the international oil market. Clearly, any threat to petrodollar holdings could undermine social programs in the U.S., including Medicare and key welfare programs such as Temporary Assistance for Needy Families.

How close is Iran to opening the Iranian Oil Bourse? The Iranian Oil Bourse is scheduled to be opened in March. Curiously, that is the same month Israel has quietly set as a deadline for a diplomatic resolution of the Iranian nuclear crisis.

Last year, President Bush was ready to concede to his liberal Democratic Party critics, allowing the EU-3 and the IAEA to lead the negotiations with Iran. Our guess is that if Iran does open an oil bourse as planned in March, Bush will take the gloves off.

The Bush administration might play with a nuclear Iran, comfortable with intelligence estimates that Iran needs much more time to produce a bomb. Maybe Iran should look more closely at the lesson of Saddam Hussein. We didn't find the WMDs our faulty intelligence claimed were in Iraq, but Hussein was trading in pertoeuros, with the full blessing of the U.N.

If Iran does open an oil bourse next month, we should expect the warplanes will soon thereafter begin to fly.

Jerome R. Corsi received a Ph.D. from Harvard University in political science in 1972 and has written many books and articles, including co-authoring with John O'Neill the No. 1 New York Times best-seller, "Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry." Dr. Corsi's most recent books include "Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil," which he co-authored with WND columnist Craig. R. Smith, and "Atomic Iran: How the Terrorist Regime Bought the Bomb and American Politicians."

Iran has said it wants to enrich uranium only to make nuclear fuel for generating electricity. But concerns that it might misuse the technology led the International Atomic Energy Agency on Saturday to report Iran to the U.N. Security Council.

The United States has long advocated Security Council action against Iran, including possible political and economic sanctions, which have not yet occurred.

Asked whether Congress had the political will to use military force against Iran if necessary, First said: "The answer is yes, absolutely."

"We cannot allow Iran to become a nuclear nation," Frist told reporters at the Missouri GOP's annual Lincoln Days conference. "We need to use diplomatic sanctions. If that doesn't work, economic sanctions, and if that doesn't work, the potential for military use has to be on the table."

Frist also defended a program in President Bush's administration that allowed the government to eavesdrop, without warrants, on international calls and e-mails in the United States that were believed to be terrorist-related.

As Senate majority leader, the Tennessee senator said he was one of eight people in Congress who were "fully briefed" on the program. He said Democrats who criticize it do so at their own political peril.

"The program is constitutional, it is lawful and it is absolutely imperative for the safety and security of people in Missouri and people around this country," Frist said.

In an interview with IRNA on Sunday Benn said he was very surprised that Russia and China supported the new resolution on Iran at the International Atomic Energy Agency (IAEA) Board of Governors meeting in Vienna on Saturday.

"It may be that they think it is better to discuss the matter in the UN where, unlike the IAEA, they have a veto power," he added.

The former MP, who in May 2001 after 50 years retired from the House of Commons, said he was extremely worried about the current situation.

He warned that if Washington and Tel Aviv commit any military adventurism against Iran, "then the whole Middle East would go up in flames".

A Cabinet minister in the Wilson and Callaghan governments from 1964 to 1979 added, "Obviously, if there is sanctions, the price of oil would go up to over 100 dollars per barrel, so this is not a sensible policy to follow in any front".

Ben, former minister of technology and secretary of state for both industry and energy said the whole reason for orchestrating this crisis was "possibly much about Israel and Bush".

He also commented on the possibility that the the US is heating up the situation for oil as Washington is feared of its transactions from dollar to the European currency.

"I think that is a much bigger question because if the dollar is undermined by the setting oil in euros, the whole American economy would get into trouble."
Benn also believed that the arguments of Tehran have not been well presented in the west.

"Iranian case is not understood, it is like Iraq: Bush is heating p and Blair goes along with it and Israel is delighted." he suggested.

Saying that the control of information is now the most powerful weapon in the world, the veteran politician added, "If you leave information at the monopoly of George Bush then you will give him advantages" on this ground.

Benn also said that the antiwar movement is organizing a massive demonstration on March 18 where the main focus would be on Iran and the occupation of Iraq.

The confrontation between the big powers over Iran continues with antagonisms hidden from view. Since December 2002, the USA has accused Iran of seeking nuclear arms in violation of the Non-Proliferation Treaty (NPT)

The seizure of Iran by the USA would mean them taking control of both the East bank of the Persian Gulf and the Southern Caspian, including their reserves of oil and gas estimated to be the second largest in the world.

Already the US have military control of part of the Caspian basin and of a corridor enabling them to link this area with the Indian Ocean (Afghanistan and Pakistan). They have also taken control of the key areas of the Gulf (Saudi Arabia and Iraq). At the end of this operation, Washington should have complete control over the world’s main hydrocarbon production and reserves. It will control the world economy without the need to share power.

At the present stage in the conflict, the big powers are divided with regard to US strategy goals. The UK, France and Germany are convinced that Iran has a nuclear arms programme. They base this on briefing by the US intelligence services who have shown them secret documents asserting that Tehran is working on a Green Salt Project aimed at developing a missile system with nuclear warheads. On the other hand, Russia, China and India consider Iran’s programme to be purely civilian in nature. They base themselves on the Fatwa of Ayatollah Khomeiny, decreeing that the production, possession and use of nuclear weapons is contrary to Islamic teaching.

Objectively, the NPT’s distinction between between legitimate civilian and prohibited military programmes is no longer pertinent given the techniques now available. Civilian know-how and facilities can easily be adapted to military use. A rigorous reading of NPT would lead to the prohibition of nuclear programmes for all states, whereas a more lax interpretation would open the door to generalized proliferation. Without dealing with this question it is impossible to resolve the Iranian case, and it is precisely this grey area which the US is exploiting in order to lead the way to war.

There is, however, perhaps one means of clarifying the situation . A special method of enriching uranium, not yet completely developed, would, once again, allow a clear distinction between civilian and military usage. Russia is endeavouring to perfect this method and proposes that it be used not only for Iran’s benefit but for that of the international community as a whole. This is expected to be one of the three major proposals which President Putin will put forward at the G8 summit in St. Petersburg, this summer.

The feasibility of this project remains to be demonstrated. Russia would produce nuclear fuel on its own territory in factories constructed in partnership with the state in question under the control of the International Atomic Energy Authority(IAEA). Detailed procedures still have to be worked out to guarantee the interests of all the protagonists. If this project were to be fully realized international relations as a whole would be turned completely upside down. Russia, as the guarantor of energy provision throughout the world would eclipse the authority of the USA which today satisfies their own energy needs at the expense of the rest of the world.

Iran has made of its nuclear programme a symbol of its independance with regard to Anglo-Saxon colonialism from which it has suffered so much. Contrary to an idea put about for some time now in the atlanticist press, this ambition is not the reserve of a particular faction within Iran but is shared throughout Iranian society. In addition, if the Islamic Republic has abandoned its dream of expansion dating from the Khomeiny revolution, nowadays, it intends to play a leading role in the rejuvenated non-aligned movement.. It also intends to share its demands regarding nuclear power with other countries and reaffirm the right to a peaceful nuclear programme, not just for itself, but for everyone.

Far from being concerned exclusively with Iran, the present diplomatic game will impact on the international balance of power and the intention of the USA, reaffirmed yesterday in the State of the Union Address, to take on unilateral global leadership.

Throughout 2004 and 2005 the various powers have been making increasingly complicated moves. A European Troika was meant to play the role of honest broker between the USA and Iran; they demanded a halt in Iran’s nuclear programme and then leant decisively towards the American camp. Iran, after accepting a two and a half year moratorium on its nuclear research, resumed them on the 10th January 2006, considering that they had waited long enough as a sign of good will without any serious response form the Europeans. The Russian position had become completely opaque, the foreign minister giving to understand that he shared the point of view of the Europeans until being put in his place by Putin who reaffirmed his commitment to a peaceful solution. Finally, a series of diplomatic missions have enabled Russia, China and Iran to develop a common strategy.

The whole question was given a kick-start when Britain organsied, on 30th January, a « private ministerial dinner » bringing together the foreign ministers of Britain, France, Germany, Russia, the USA and China.. In the course of this meeting, Jack straw, British foreign minister proposed that the IAEA refer the question to the Security Council, the first step on the way to war. His Russian and Chinese opposite numbers emphasized that such a decision would have no basis in international law. Confident in the viability of their uranium enrichment project, the Russian Federation wished simply to play for time, the time necessary to put together an agreement with Iran i.e. one or two months according to the experts. The dinner was concluded by setting out a timetable which each side presented as a victory: the IAEA Council of Governors will not be able to refer Iran to the UN Security council next week because it lacks the power to do so, but will demand of the UNSC that it be given the powers to do so at a future date.

This compromise allows the Americans and Europeans to maintain the pressure and the Russians and Chinese to gain time. Working out who came out best depends on whether you consider the glass half-full or half-empty.

In practice, assuming that the Security Council gives the Council of Governors the requisite powers, the latter can only put them into effect at their next meeting on 9th March.

The Iranians make play of resenting this horse trading as a betrayal by their friends the Russians. But, it is quite possible that they have obtained a written guarantee from the Russians that they will veto any vote by the Security council authorizing war.

Whatever the case may be, the Iranians are appealing to their partners in the non-aligned movement for help. President Ahmadinejad received a phone call of support from Thabo Mbeki( South Africa, who had produced nuclear during the apartheid era, along with Israel, later renounced them). Indonesia has repeatedly called for peace, whilst Venezuela and Malaysia are soon to receive the Iranian president.

At the same time, Iran is preparing « a world without Israel and the USA ». Tehran is optimistic about putting in place an oil spot market which doesn’t accept dollars. This is already working at an experimental stage. If no nation has officially announced its participation, many are encouraging participation through private companies acting as intermediaries. Now, the dollar is an overvalued currency whose value is maintained essentially by its role as a petro-currency. Such a spot market, once really up and running, would provoke a collapse of the dollar, comparable to hat of 1939, even if its transactions only amounted to a tenth of the world turnover. US power would be undermined by the falling dollar and, in time, Israel would also find itself bankrupt

Washington is then obliged to apply all its force to ensure that the major world powers break with Tehran. Short of war, the US must at least succeed in imposing economic isolation on Iran. Paradoxically, neither option seems possible. The US and Tsahal can hardly bomb Iran’s nuclear sites, since these are maintained by Russian advisers and technicians. Attacking Iran would imply declaring war against Russia. Furthermore, even if strikes were possible, Iran would not neglect to strike back at Israel with the devastating Thor-1 missiles sold to them by the Russians. The Shiites would make life even harder for the occupation forces in Iraq. If the US choose to use an economic blockade of Iran, this could easily be bypassed through Iran’s special relationship with China. Meanwhile, Iran would deny the West part of its oil supply, bringing about a rise in prices of 300% per barrel and a huge economic crisis.

Quite clearly, the outcome of this confrontation depends on the ability of each protagonist to impose his own timetable on events. Meanwhile, the Bush administration stubbornly drives towards a confrontation which it lacks the means to carry through successfully and in which it risks loosing its authority.

"If you want to try to wait until the very last minute, you'd better be very confident of your intelligence because if you're not, you won't know when the last minute is," Perle told Reuters on the sidelines of an annual security conference in Munich.

"And so, ironically, one of the lessons of the inadequate intelligence of Iraq is you'd better be careful how long you choose to wait."

Perle said Israel had chosen not to wait until it was too late to destroy the key facility Saddam Hussein's secret nuclear weapons program in Osirak, Iraq in 1981. The Israelis decided to bomb the Osirak reactor before it was loaded up with nuclear fuel to prevent widespread radioactive contamination.

"I can't tell you when we may face a similar choice with Iran. But it's either take action now or lose the option of taking action," he said.

Asked if he thought a military strike against Iran's nuclear facilities was an inevitability, Perle said: "I hope that can be avoided but that's always a possibility. We are talking about physical facilities and they're always vulnerable."

Perle is one of the top U.S. neoconservatives who advocated a pre-emptive invasion of Iraq to topple Saddam and seize alleged stockpiles of weapons of mass destruction. No such stockpiles were found after the war and U.S. President George W. Bush has acknowledged that the intelligence was bad.

Perle served under U.S. President Ronald Reagan as an assistant secretary of defense and on the Defense Policy Board Advisory Committee from 1987 to 2004. He was an influential chairman of the Board from 2001 to 2003.

"At the end of the day, it shows that Iran will pay a very heavy price if it continues with its plans to try and enrich its fuel in order to be able to use it as an option to make non-conventional weapons," the interim prime minister said.

Meanwhile, Iran has ended all voluntary cooperation with the IAEA, Foreign Minister Manouchehr Mottaki announced Sunday.

"We ended all the voluntary cooperation we have been extending to the IAEA in the past two and a half to three years, on the basis of the president's order," Mottaki said. "We do not have any obligation toward the additional protocol (anymore)."

The announcement means Iran has resumed uranium enrichment and will no longer allow snap IAEA inspections of its nuclear facilities, both voluntary measures it had allowed in recent years in a goodwill gesture to build trust.

"Because of the resolution of the IAEA ... the organization should stop voluntary implementation of the Additional Protocol and other cooperation from Sunday," Iranian President Mahmoud Ahmadinejad said on Saturday.

Iran announced that it sees the referral to the Security Council as the end of diplomacy. The head of the Iranian delegation to the IAEA, Javed Vaeidi, deputy head of Iran's National Security Council, told journalists after the resolution was passed that Iran "now has to implement a fuller scale of enrichment."

Resolution links Israeli, Iranian programs
At the last minute, an unprecedented article was introduced into the United Nations resolution that indirectly refers to Israel in its call for a "Middle East free of weapons of mass destruction." This is the first time a link has been made between the Israeli and Iranian nuclear programs. The article was approved in order to create as wide a consensus as possible among IAEA members.

According to Israeli intelligence, Iran will have the knowledge, ability and technology to create nuclear weapons some 12 to 18 months after it begins to enrich uranium. However, they also note that it will be another two to three years before Iran will have the quantity of material needed to assemble its first atom bomb.

American intelligence, in contrast, puts the time needed at eight years, due to expected difficulties in acquiring equipment, materials and technology, as well as know-how.

Israel's envoy to the IAEA, Yisrael Michaeli, said the clause calling for a WMD-free zone in the Middle East is unacceptable, especially under present circumstances. While there is a consensus for the need to rid the region of weapons of mass destruction, approving such a call at this time is detrimental, Michaeli told the board.

In response to a query by Haaretz as to whether the resolution refers to Israel's nuclear weapons program, the U.S. Permanent Representative to the IAEA Ambassador Gregory Schulte replied that the resolution is in reference to Iran.

The IAEA resolution was approved after three days of deliberations that exposed the deep rifts among the 35 members of the board of governors, as well as the reluctance of the non-allied nations to support it. The resolution was eventually adopted with a 27-vote majority. Three states voted against (Cuba, Venezuela and Syria) and five abstained (Algeria, South Africa, Libya, Indonesia and Belarus).

According to the resolution, the Security Council can discuss Iran's nuclear program only next month, after IAEA Secretary General Mohamed ElBaradei presents his full report to the board of governors. At this stage, the Security Council is not considering sanctions against Iran, due to opposition from Russia and China.

After the vote, U.S. IAEA Ambassador Greg Schulte told Haaretz that the United States still seeks a diplomatic solution to the Iranian nuclear program. But he also said the resolution should have been taken a few years ago, after Iran's violations of its international obligations in this matter. Schulte noted that the only states that voted against isolating Iran are themselves isolated states.

He called on Tehran to suspend all uranium enrichment activities, including research and development, because the country has no need for civilian uses of atomic energy. The American also called on the country not to build the new research reactor it is constructing in Arak, which he said could be used to create plutonium for nuclear weapons, because the country does not need it.

Schulte asked Iran to stop making threats, to accept the resolution, to act wisely and with restraint, and to demonstrate transparency about its entire nuclear program.

British IAEA Ambassador Peter Jenkins, who together with his French and German counterparts sponsored the resolution, said it "sends a message of concern ... and a continuing lack of confidence in Iran's nuclear intentions. Board members cannot understand why Iran is so determined to press on with its enrichment program."

Jenkins expressed hope that Iran would take confidence-building measures and suspend its uranium enrichment program in the one-month break before the Security Council takes up the issue.

Welcoming the vote by the UN nuclear watchdog on Saturday to report Iran to the Security Council, McCain repeated that military action against Tehran must remain an option if it did not bow to international demands to halt its nuclear activities.

"Immediate UN Security Council action is required to impose multilateral sanctions, including a prohibition on investment, a travel ban, and asset freezes for government leaders and nuclear scientists," McCain told a security conference in Munich.

"Should Russia and China decline to join our peaceful efforts to resolve the nuclear issue, we should seek willing partners to impose these sanctions outside the UN framework."

Russia and China are permanent members of the UN Security Council, along with the United States, Britain and France.

Washington, Europe and others believe the Islamic Republic is seeking to make the atomic bomb. Tehran says its nuclear program is designed solely to generate electricity.

"Every option must remain on the table. There is only one thing worse than military action, that is a nuclear-armed Iran," said McCain, repeating comments made at last month's World Economic Forum in Davos, Switzerland.

He added however that military action was a "totally undesirable option" of last resort.

In a 27-3 vote on Saturday, the International Atomic Energy Agency's board opted to notify the Security Council on Iran.

No Council action, including sanctions, will be considered before a conclusive IAEA investigative report due next month.

McCain said Iran would be a key test of U.S.-Russia ties. Without singling out policies, he criticized the government of President Vladimir Putin for a lack of democracy and mooted a boycott of a Russia-hosted G8 summit this year.

"Under Mr Putin, Russia today is neither a democracy nor an economic power. I seriously question whether G8 leaders should attend the G8 summit," McCain said.