The council has struggled for three weeks to come up with a written rebuke that would urge Iran to comply with several demands from the board of the U.N. nuclear watchdog, the International Atomic Energy Agency, to clear up suspicions about its intentions. Tehran insists its nuclear program is for peaceful purposes.

"The council is expressing its clear concern and is saying to Iran that it should comply with the wishes of the governing board," Britain's U.N. Ambassador Emyr Jones-Parry told reporters.

The West believes council action will help isolate Iran and put new pressure on it to clear up suspicions about its intentions. They have proposed an incremental approach, refusing to rule out sanctions.

U.S. officials have said the threat of military action must also remain on the table.

Russia and China, both allies of Iran, oppose sanctions. They wanted the council statement to make explicit that the IAEA, not the Security Council, must take the lead in confronting Iran.

But even though the statement is not legally enforceable, the talks have been extremely sensitive because of the statement's larger significance.

Britain, France and the United States wanted the council statement out of the way before their foreign ministers, as well as Germany's meet in Berlin on Thursday to discuss strategy regarding Iran.

Wednesday's meeting of the five veto-wielding members of the council -- the United States, Britain, France, China and Russia -- was the fourth in fewer than 24 hours.

In Moscow on Wednesday, Russian Foreign Minister Sergey Lavrov repeated his stance that Moscow would not support the use of force to solve the Iranian nuclear problem.

"As many of our European and Chinese colleagues have stated more than once, any ideas involving the use of force or pressure in resolving the issue are counterproductive and cannot be supported," Lavrov said.

Iran remains defiant. The government released a statement through its embassy in Moscow on Tuesday warning that Security Council intervention would "escalate tensions, entailing negative consequences that would be of benefit to no party."

The Iranian negotiating offer, transmitted to the State Department in early May 2003 by the Swiss ambassador in Tehran, acknowledged that Iran would have to address US concerns about its nuclear program, although it made no specific concession in advance of the talks, according to Flynt Leverett, then the National Security Council's senior director for Middle East Affairs.

Iran's offer also raised the possibility of cutting off Iran's support for Hamas and Islamic Jihad and converting Hezbollah into a purely socio-political organization, according to Leverett. That was an explicit response to Powell's demand in late March that Iran "end its support for terrorism".

In return, Leverett recalls, the Iranians wanted the US to address security questions, the lifting of economic sanctions and normalization of relations, including support for Iran's integration into the global economic order.

Leverett also recalls that the Iranian offer was drafted with the blessing of all the major political players in the Iranian regime, including Supreme Leader Ayatollah Ali Khomeini.

Realists, led by Powell and his deputy, Richard Armitage, were inclined to respond positively to the Iranian offer. Nevertheless, within a few days of its receipt, the State Department had rebuked the Swiss ambassador for having passed on the offer.

Exactly how the decision was made is not known. "As with many of these issues of national security decision-making, there are no fingerprints," Wilkerson told IPS. "But I would guess Dick Cheney with the blessing of George W Bush."

As Wilkerson observes, however, the mysterious death of what became known among Iran specialists as Iran's "grand bargain" initiative was a result of the administration's inability to agree on a policy toward Tehran.

A draft National Security Policy Directive (NSPD) on Iran calling for diplomatic engagement had been in the process of interagency coordination for more than a year, according to a source who asked to remain unidentified.

But it was impossible to get formal agreement on the NSPD, the source recalled, because officials in Cheney's office and in under secretary of defense for policy Douglas Feith's Office of Special Plans wanted a policy of regime change and kept trying to amend it.

Opponents of the neo-conservative policy line blame Condoleezza Rice, then the national security adviser, for the failure of the administration to override the extremists in the administration. The statutory policymaker process on Iran, Wilkerson told IPS in an e-mail, was "managed by a national security adviser incapable of standing up to the cabal ..."

In the absence of an Iran policy, the two contending camps struggled in 2003 over a proposal by realists in the administration to reopen the Geneva channel with Iran that had been used successfully on Afghanistan in 2001-02. They believed Iran could be helpful in stabilizing post-conflict Iraq, because the Iraqi Shi'ite militants whom they expected to return from Iran after Saddam Hussein's overthrow owed some degree of allegiance to Iran.

The neo-conservatives tried to block those meetings on tactical policy grounds, according to Leverett. "They were saying we didn't want to engage with Iran because we didn't want to owe them," he recalled.

Nevertheless, US ambassador to Afghanistan Zalmay Khalilzad (now envoy in Iraq) was authorized to begin meeting secretly in Geneva with Iranian officials to discuss Iraq. The neo-conservatives then tried to sandbag the talks by introducing a demand for full information on any high-ranking al-Qaeda cadres who might be detained by the Iranians.

Iran regarded that information as a bargaining chip to be given up only for a quid pro quo from Washington. The Bush administration, however, had adopted a policy in early 2002 of refusing to share any information with Iran on al-Qaeda or other terrorist organizations.

On May 3, 2003, as the Iranian "grand bargain" proposal was on its way to Washington, Tehran's representative in Geneva, Javad Zarif, offered a compromise on the issue, according to Leverett: if the US gave Iran the names of the cadres of the Mujahideen-e Khalq (MEK) who were being held by US forces in Iraq, Iran would give the US the names of the al-Qaeda operatives they had detained.

The MEK had carried out armed attacks against Iran from Iraqi territory during the Hussein regime and had been named a terrorist organization by the US. But it had capitulated to US forces after the invasion, and the neo-conservatives now saw the MEK as a potential asset in an effort to destabilize the Iranian regime.

The MEK had already become a key element in the alternative draft NSPD drawn up by neo-conservatives in the administration.

The indictment of Iran analyst Larry Franklin on Feith's staff last year revealed that, by February 2003, Franklin had begun sharing a draft NSPD that he knew would be to the liking of the Israeli Embassy.

(Franklin eventually pleaded guilty to passing classified information to two employees of an influential pro-Israel lobbying group and was sentenced to 12 and a half years in prison.)

Reflecting the substance of that draft policy, ABC News reported on May 30, 2003, that the Pentagon was calling for the destabilization of the Iranian government by "using all available points of pressure on the Iranian regime, including backing armed Iranian dissidents and employing the services of the Mujahideen-e Khalq ..."

Nevertheless, Bush apparently initially saw nothing wrong with trading information on MEK, despite arguments that MEK should not be repatriated to Iran. "I have it on good authority," Leverett told IPS, "that Bush's initial reaction was, 'But we say there is no such thing as a good terrorist.'" Nevertheless, Bush finally rejected the Iranian proposal.

By the end of May, the neo-conservatives had succeeded in closing down the Geneva channel for good. They had hoped to push through their own NSPD on Iran, but according to the Franklin indictment, Franklin told an Israeli Embassy officer in October that work on the NSPD had been stopped.

But the damage had been done. With no direct diplomatic contact between Iran and the US, the neo-conservatives had a clear path to raising tensions and building political support for regarding Iran as the primary enemy of the United States.

In an in-depth report for the Oxford Research Group, titled "Iran: Consequences of a War," Prof. Paul Rodgers writes that Israel has bought [or has been given-Ed.] all the necessary weapons from the United States for such an attack, including long-range fighters and a large supply of so-called "bunker-buster bombs," capable of penetrating hardened underground bunkers.

The targets of such an attack would initially be the Tehran nuclear reactor, as well as a radioisotope facility and a range of laboratories and other facilities, all of them in heavily populated areas.

If the newest reactor at Bushehr were to be targeted after it comes on line later this year, such an attack could lead to a Chernobyl-type disaster with radioactive clouds rising over most gulf countries.

According to Rodgers, if the United States is drawn into such an attack with the aim of setting back Iran's nuclear program, the British could also find themselves dragged into the affair by being asked to provide bases for the refueling of U.S. aircraft as happened when F-111s were used to bomb the Libyan capital of Tripoli in 1986.

If bombings were launched this year against Iran they would, claims the Oxford report, be launched simultaneously in order to kill as many of the technical staff as possible at the various nuclear sites. Iran would be unable to prevent such an air assault because of its lack of a functioning anti-missile and anti-aircraft arsenal.

Some experts dispute this aspect of the report, however, due to recent high-tech weapons purchases Iran has made from North Korea, China and Russia.

In the past decade, it is known that Iran has acquired hundreds of medium-range missiles from China and North Korea and an unknown number of long-range Sunburst cruise missiles from Ukraine, which, it is believed, could be used to sink U.S. ships in the Persian Gulf.

Israeli hawks in Tel Aviv and their allies in Washington want Americans to believe that Iran is a major threat to U.S. and Israeli interests in the Middle East.

The Israelis and their neo-con backers had hoped a successful invasion of Iraq and the overthrow of Saddam Hussein would undermine the clerical leadership in Iran and lead to its overthrow by an emerging democratic movement led by the youth of the country. To the dismay of Washington and Tel Aviv, however, the war in Iraq has failed to achieve that goal, and the power of the religious leadership in Iran has grown significantly.

The prospect of a nuclear-armed Iran stands in the way of Israeli hegemony in the Middle East. Israeli hardliners have convinced many Americans that they should be the only Middle East country with nuclear weapons. It is estimated that the Israeli nuclear arsenal contains as many as
400 nukes.

In order to plan for an attack on Iran, recent reports indicate Israel has been buying long-range versions of American-made F-15 and F-16 aircraft. Beginning in 2003, the Israeli air force purchased 102 F-16s and 500 bunkerbuster bombs.

Efforts are also under way to equip Israeli submarines, including ones given to Israel by Germany, and naval surface vessels with cruise missiles that could reach Iran.

The Oxford Report points to an alarming trend: in the past two years, there has been the appearance of a strengthening of the relationship between the Israeli defense forces and the U.S. Army's Training and Doctrine Command.

The report warns: "Although not commonly covered in the western
media, this relationship is well known in the Middle East and would contribute to an assumption that any Israeli attack on Iran would be undertaken with the knowledge, approval and assistance of the United States. It is certainly the case that an Israeli air attack on Iran would involve flights through airspace currently dominated by the United States."

Rodgers also makes the point in his report that close links between Israel and the United States are far more widely recognized in the Middle East than in the United States and in Europe. Therefore, any Israeli action would
be seen as a joint operation with "Israel acting as surrogate and doing so with direct U.S. support."

He speculates that this would mean that Iranian retaliation would be directed at U.S. interests in the gulf and at U.S. forces in Iraq. Hezbollah, regarded as the most formidable terrorist organization on the planet, would be encouraged by Tehran to launch attacks on Israel from Lebanon and to coordinate strikes against U.S. targets across the Persian Gulf, in Iraq and in the continental U.S. While Israel would enjoy a short-term advantage over Hezbollah forces in Lebanon, there would be long-term consequences for both Israeli and U.S. interests.

It would be costly in terms of lives, money and influence. Perhaps the most troubling outcome, says Rodgers, would be the likelihood of a prolonged military confrontation, which would probably spread to other gulf nations.

Any attack on Iran by Israel, he says, no matter how small, would surely escalate to involve the United States and its bogged-down forces in Iraq.

Rice spoke after a meeting in Berlin among diplomats from the five veto-wielding members of the U.N. Security Council plus Germany over ways to press Iran to stop enriching uranium, which can be used for weapons. Iran says its program is peaceful.

The meeting follows agreement Wednesday by the 15-member Security Council to ask the U.N. nuclear watchdog, the
International Atomic Energy Agency, to report back in 30 days on Iran's compliance with demands to stop enriching uranium.

In Vienna, Iran's chief representative to the IAEA, Ali Asghar Soltanieh, told The Associated Press that "it is impossible to go back to suspension."

"This enrichment matter is not reversible," Soltanieh said.

Rice said the Berlin meeting sends "a very strong signal to Iran that the international community is united."

She hinted at escalating Security Council action should Iran disregard the council's demand that it freeze enrichment, although remarks from Russian and Chinese representatives suggested strains in the alliance facing down Tehran.

Russian Foreign Minister Sergey Lavrov said the issue of sanctions was not discussed at the meeting and were not supported by Moscow.

"Russia on principle doesn't think sanctions can achieve a settlement, especially in the Middle East where there's so much going on," he said.

Lavrov's remarks were echoed by China's Vice Foreign Minister Dai Bingguo, who called for a "peaceful solution" and added there was "too much turmoil" in the region.

"This issue is among the most difficult and complicated in today's world, it requires time, persistence and wisdom, and it can only be resolved through peaceful means," Dai said, adding his country would "work together with the other sides."

The United States and Britain used tougher rhetoric.

British Foreign Minister Jack Straw said Iran had "miscalculated."

"The onus is on Iran to show the international community that its program is entirely for civil purposes and for no other," Straw said. "We have shown very great patience with Iran. They in turn have miscalculated.

"They thought the international community would be divided on this issue but in fact they have become more and more united," he added.

German Foreign Minister Frank-Walter Steinmeier said that his country and the five permanent members remained intent on a "diplomatic solution" to the dispute.

He held out hope Tehran might reconsider, telling reporters: "We hope that the declaration by the Iranian ambassador is not the last word offered on this."

Steinmeier said the 30-day window agreed on by the Security Council declaration gives Iran time to "make a choice between isolation ... or a return to the negotiating table.

"We all very much hope that Iran will seize the offer to resume negotiations and we use this opportunity to once again call on Iran to suspend all enrichment activities and to open up once again the path leading to negotiations," he said.

Wednesday's statement from the Security Council took into account the Russian and Chinese reservations about too much toughness, while meeting U.S., French and British calls for keeping the pressure on Tehran.

The modest statement did not go as far as the United States had wanted. It is not legally binding and carries no explicit penalties for Iran if it does not comply, but Rice said it is an important first step. The Security Council could eventually impose economic sanctions, though Russia and China say they oppose such tough measures.

The statement also calls on Iran to ratify the IAEA's additional protocol, which allows unannounced inspections.

The Security Council could eventually impose economic sanctions, though Russia and China say they oppose such tough measures.

The Europeans initially proposed a much stronger statement but accepted a milder one to secure the support of Russia and China. Western countries agreed to drop language that proliferation "constitutes a threat to international peace and security." Also gone is a mention that the council is specifically charged under the U.N. charter with addressing such threats.

Russia and China had opposed that language because they wanted nothing in the statement that could automatically trigger council action after 30 days.

The West has refused to rule out sanctions, and U.S. officials have said the threat of military action must also remain on the table.

In Geneva, Iranian Foreign Minister Manouchehr Mottaki condemned "unjustified propaganda" about its program.

"Iran's nuclear program is peaceful and has never diverted towards prohibited activities," Mottaki told the 65-nation Conference on Disarmament.

But, he added, Iran is willing to continue talks with the IAEA.

"We are willing to continue with negotiations and also continue with our sincere and constructive cooperation with the agency," Mottaki told reporters. "Our cooperation with the agency will continue."

Negotiations between Iran and France, Germany and Britain collapsed in August after Tehran rejected a package of incentives offered in return for a permanent end to uranium enrichment. Its moves to develop full-blown enrichment capabilities led the IAEA's board to ask for Security Council involvement.

Flying in for talks on Iran with Washington's European allies as well as Russia and China, Rice welcomed the UN Security Council presidential statement adopted Wednesday as an important diplomatic marker.

But she acknowledged that the text, which calls on Iran to abandon sensitive uranium-enrichment activities yet does not threaten sanctions, was a compromise struck after weeks of haggling, notably with Russia.

"We've had tactical differences and this gives us the chance to stay together as we move forward," Rice said en route from Washington.

"When you are taking a first step, the unity of ... the Security Council is extremely important."

If Washington wanted unity, Russia wanted no mention of coercive force.

"We were willing to deal with the Russians on their concern and clearly they were willing to deal with us on our concern," Rice said.

She was meeting here with counterparts from the council's other four permanent members -- Russia, China, Britain and France -- plus Germany, for what she called an opening debate on the next steps in the nuclear dispute.

"This is not to go and write another statement. We've finished that," the chief US diplomat told reporters. "This is really to have an open discussion about how to move forward."

Rice denied the UN Security Council vote Wednesday was aimed at paving the way for tough action against Iran.

"We're not trying to hide a chapter seven resolution in a presidential statement," she said referring to the chapter of the UN charter that declares a threat to peace or stability.

She did not detail what measures the United States had in mind, saying that would depend largely on Iran's reaction to the UN statement. But she suggested they might not necessarily involve sanctions, which Moscow and Beijing oppose.

Now that the matter has reached the UN Security Council, she said, "you have a number of options at your disposal and it's not just sanctions of the kind that people have always thought about."

One move might be sending strong political messages to Tehran to hammer home the clerical regime's isolation, Rice said. She also suggested pressure could be applied to Iran's current nuclear program, which Tehran insists is strictly peaceful.

"I think we have to look at how those (nuclear) capabilities are being supported and what we might do about the support to those capabilities," she said without elaborating.

Rice brushed off Iran's threats to bar access to international inspectors if the West moved against its nuclear program. She said Tehran felt no compunction about pursuing its sensitive nuclear research even with inspectors on hand.

"If Iran makes that threat and carries through on it then I think we'll have a better and clearer view of what Iran's intentions really are. And so that's not a cost-free move by the Iranians," she said.

The secretary again called Tehran's nuclear program "one of the most important issues in the international system at this time" but said the Berlin meeting could also take up other dimensions of what Washington considers the Iranian threat.

These include, she said, Iran's role in global terrorism, its repressive government, its support for armed Palestinian resistance to Israel and its status as a "troublesome regime for peace and stability in the Middle East."

Rice was also due to have talks Thursday with German Chancellor Angela Merkel and fly to Paris to confer with French President Jacques Chirac before heading to Britain to visit the home constituency of Foreign Secretary Jack Straw.

Germany, France and Britain led more than a year of efforts to coax Iran out of its suspected nuclear arms program by offering economic and other incentives. The talks collapsed on January when Tehran said it was resuming sensitive research.

Iran has two armed forces in which both have their own ground, naval and air force all under the command of Iran's supreme leader Ayatollah Ali Khamenei.

He added: "We hope ... We will gain the necessary and needed readiness to decisively reply to any kind of threats."

"More than 17,000 soldiers and sailors will be used, along with 1,500 different kind of vessels, in addition to the different sorts of jet fighter planes, choppers and different missiles," he added, but did not say whether Iran will use its ballistic missiles.

Iran has medium-range Shahab-3 missiles with the capability of 2,000 kilometers (1,280 miles), able of hitting arch-enemy Israel and US bases across the Middle East.

"The exercise will cover an area stretching from the northern tip of the Persian Gulf all the way to the port city of Chah-Bahar in the Sea of Oman extending 40 kilometers (25 miles) into the sea," he said.

In addition, the spokesman of the maneuvers, Rear Admiral Mohammad Ebrahim Dehghan told state television that the strait of Hormouz will be one of the focal points of the exercise.

"Some 80 percent of the Persian Gulf's oil is shipped out of this strait over which Iran has dominant and accurate control," he said.

"If the enemy wants to make the area insecure, he should be rest assured that he will also suffer from the insecurity, since we know the location of their vessels," he added.

The country is currently under mounting international pressure over its disputed nuclear energy drive, alleged by Israel and the West to be cover for weapons development. Tehran denies the charges.

Top diplomats from the five permanent members of the UN Security Council plus Germany will meet in Berlin on Thursday to map out a long-term strategy on how to contend with Iran's refusal to halt uranium enrichment, which could be used to build a nuclear bomb.

In Israel, Tehran's arch foe, however, several officials have openly hinted at the possibility of pre-emptive strikes against Iran, seen as a threat to the existence of the Jewish state.

On Wednesday, Russian Foreign Minister Sergei Lavrov warned that any attempt at using force or coercion to resolve the standoff over Iran's nuclear program would be counter-productive.

"Any ideas about a coercive, forceful solution to the issue are highly counter-productive and cannot be supported," Lavrov told reporters in Moscow.

Iran's Defense Minister Mostafa Mohammad Najjar said nearly two months ago that Islamic republic will give an "extremely quick and destructive response" to any attack against its nuclear facilities.

However, Iran -- OPEC's second biggest oil producer -- has been sending mixed messages over whether it would use its oil exports as a weapon in the case of action from the UN Security Council.