Iran nuclear row looms over Bali summit

NUA DUSA, Indonesia: Leaders of eight Muslim-majority nations signed agreements aimed at lowering trade barriers and boosting economic cooperation on Saturday, at a summit overshadowed by fears about Tehran's nuclear program.

The Developing Eight (D-8), holding its fifth summit since its funding in 1997, groups some of the world's most populous Muslim-majority nations and is aimed primarily at raising living standards of its members' more than half a billion people.

But focus on these goals has been diverted by worries that nuclear projects in Iran may have military aims. Iran, the D-8's outgoing chairman, says the projects are for peaceful purposes.

The D-8 has touched on nuclear energy in discussions of cooperation on developing alternate sources of power, but has thus far not directly addressed the dispute over Iran.

The United States wants to curb programs it fears could lead to atomic weapons and has asked the U.S. Security Council to pressure Iran.

Adding to concerns, U.S. inspectors have found traces of near bomb-grade enriched uranium on nuclear equipment in Iran, diplomats said on Friday, as the EU prepared a declaration that will insist Tehran shelve all enrichment work.

The United States has pushed for a Security Council resolution on Iran's nuclear program. That step is now on hold while European Union officials shape a "carrots and sticks" offer to Tehran on the issue.

The package of incentives will insist Iran shelve uranium enrichment work, according to an EU draft leaked on Friday, even though Tehran has ruled this out in advance.

In a visit to Jakarta before coming to the summit, Ahmadinejad called Western pressure "psychological propaganda."

The United States and its allies suspect Iran's professed ambition to purify uranium to generate electricity is a smoke-screen, a concern stoked by Tehran's 18-year concealment of sensitive enrichment research.

But Russia and China have resisted any U.S. Security Council resolution that could spawn sanctions.

reuters.com 5/13/06