UN watchdog, EU's Ashton to press Iran in nuclear dispute

By Fredrik Dahl and Parisa Hafezi

VIENNA/ISTANBUL (Reuters) - Iran faces international pressure in two separate meetings over its nuclear program on Wednesday, but with the Islamic state focused more on a June presidential election no breakthrough is expected in the dispute.

In Vienna, the U.N. nuclear agency will once again urge Iran to stop stonewalling its investigation into suspected atomic bomb research by Tehran, which denies any intent to make such weapons. The talks are due to start around 10 a.m. (0400 ET).

Later over dinner in Istanbul, the European Union's top diplomat will meet Iran's chief nuclear negotiator - also now a presidential candidate - to discuss a broader diplomatic bid to resolve a row that could trigger a new war in the Middle East.

The two sets of talks represent distinct diplomatic tracks but are linked because both center on suspicions that Iran may be seeking to develop the capability to assemble nuclear weapons behind the facade of a declared civilian atomic energy program.

Any movement in the decade-old standoff will probably have to wait until after Iran's unpredictable June 14 election to choose a successor to President Mahmoud Ahmadinejad, analysts and diplomats say.

Even though it is Supreme Leader Ayatollah Ali Khamenei who decides Iran's nuclear policy, the conservative leadership may want to tread cautiously ahead of a vote in which loyalists will be challenged by two major independents.

With the election coming up, "the Iranians will do everything to keep everything stable," one Western envoy said.

Baqer Moin, an Iran expert based in London, said: "The supreme leader is not the only decision-maker ... Iran cannot make any final decision now."

SPECTRE OF MILITARY ACTION

Israel and the United States have warned of possible military action against Iran if diplomacy and increasingly tough trade and energy sanctions fail to make it curb its nuclear programme.

Tehran says it is a purely peaceful project to generate electricity and that it is Israel, widely believed to be the Middle East's only nuclear-armed power, that threatens peace and stability in the region.

The International Atomic Energy Agency has been trying for more than a year to coax Iran into allowing it to resume an inquiry into what the U.N. watchdog describes as the "possible military dimensions" to Tehran's nuclear programme.

Wednesday's talks in Vienna will be the 10th round of negotiations between the two sides since early 2012, so far without an agreement that would give the IAEA the access to sites, officials and documents it says it needs.

Iran's IAEA envoy, Ali Asghar Soltanieh, said this week he expected progress to be made in the discussions. But Western diplomats voiced pessimism.

The Istanbul meeting between EU foreign policy chief Catherine Ashton, who represents six world powers, and Iran's chief nuclear negotiator Saeed Jalili follows a failed round of big power diplomacy in Kazakhstan in early April.

The gap is wide: the powers want Iran to suspend its most sensitive nuclear activity. Iran wants them to recognize its "right" to refine uranium - which can have both civilian and military purposes - and an end to tough economic sanctions.

(Additional reporting by Justyna Pawlak in Brussels; Editing by Mark Heinrich)

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North Korea could reach U.S. with nuclear arms: Pentagon

By David Alexander

WASHINGTON (Reuters) - North Korea's continuing development of nuclear technology and long-range ballistic missiles will move it closer to its stated goal of being able to hit the United States with an atomic weapon, a new Pentagon report to Congress said on Thursday.

The report, the first version of an annual Pentagon assessment required by law, said Pyongyang's Taepodong-2 missile, with continued development, might ultimately be able to reach parts of the United States carrying a nuclear payload if configured as an intercontinental ballistic missile.

North Korea launched a multi-stage rocket that delivered a satellite into orbit in December, an advance that "contributes heavily" to the country's development of a long-range ballistic missile capability, the report said.

It is also continuing to refine its atomic weapons capability, including with a nuclear detonation in February, and is capable of conducting "additional nuclear tests at any time," the report said.

"These advances in ballistic-missile delivery systems, coupled with developments in nuclear technology ... are in line with North Korea's stated objective of being able to strike the U.S. homeland," the report said.

"North Korea will move closer to this goal, as well as increase the threat it poses to U.S. forces and allies in the region, if it continues testing and devoting scarce regime resources to these programs," it said.

The document characterized North Korea as one of the biggest U.S. security challenges in the region because of its effort to develop nuclear arms and missiles, its record of selling weapons technology to other countries and its willingness to "undertake provocative and destabilizing behavior."

The report comes at a sensitive time in the region, with friction between Washington and Pyongyang only now beginning to ease following two months of increasingly shrill rhetoric that seemed to edge the Korean peninsula close to war.

Tensions between the two countries rose sharply after North Korea put the satellite into space in late December and conducted the nuclear test in February. The test triggered new U.N. sanctions, which led to a barrage of threats from Pyongyang.

North Korea went so far as to warn of nuclear strikes on the United States and South Korea, as its new leader, Kim Jong-un, marked his first year in office following the death of his father.

The U.S. and South Korean militaries went ahead with a long-scheduled military exercise despite the threats and Washington sending stealth bombers and other planes to the region in a show of force.

North Korea signed a deal to get rid of its nuclear program in exchange for aid in 2005 but later backed out of the pact and now says it will not give up its atomic weapons program.

The United States has firmly rejected North Korean demands that it be recognized as a nuclear-armed state. Washington has stepped up its diplomacy with China over the issue.

(Reporting By David Alexander; Editing by David Brunnstrom)

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Quake hits near Iran's nuclear city Bushehr, 37 dead

DUBAI (Reuters) - An earthquake measuring magnitude 6.3 struck on Tuesday 89 km (55 miles) southeast of the city of Bushehr in Iran, where the country's only nuclear power station is located, the U.S. Geological Survey (USGS) reported.

The Iranian Seismological Centre at the University of Tehran reported a quake of 6.1 magnitude whose epicenter was Kaki, around 60 miles south of Bushehr, a port city on the Gulf.

Reuters witnesses felt the quake across the Gulf in Dubai, and Twitter users in Bahrain reported that offices in Manama had been evacuated after it struck.

The USGS said the quake struck at 1152 GMT at a depth of 10 km.

There was no immediate word on damages.

(Reporting by Yeganeh Torbati and Marcus George; Editing by Robin Pomeroy)

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Powers and Iran fail to end nuclear deadlock in Almaty

By Justyna Pawlak and Yeganeh Torbati

ALMATY (Reuters) - World powers and Iran failed again to end the deadlock in a decade-old dispute over Tehran's nuclear program in talks that ended in Kazakhstan on Saturday, prolonging a standoff that could yet spiral into a new Middle East war.

No new talks were scheduled but big power negotiators, who earlier this year were insisting that time was running out, were at pains to say the diplomatic process would continue.

Iran's critics accuse it of covertly seeking the means to produce nuclear bombs. Israel, widely believed to have the Middle East's only nuclear arsenal, sees Iran's nuclear program as a potential threat to its existence.

With a presidential election due in Iran in June, scope for a breakthrough at the two-day meeting in Almaty was slim.

European Union foreign policy chief Catherine Ashton, the powers' chief negotiator, said long discussions had not bridged the differences between the two sides.

"It became clear that our positions remain far apart," Ashton, who represents the United States, Russia, China, France, Britain and Germany in talks with Iran, told a news conference.

In the meeting, the powers were asking Iran to suspend its most sensitive uranium-enrichment work in return for modest relief from international sanctions, an offer Iran did not accept.

"The Iranians indicated readiness to take some steps but they were small," one Western diplomat said.

Iran says its nuclear work is entirely peaceful and that it is Israel's assumed atomic arsenal that threatens peace.

"NO BREAKDOWN"

A senior U.S. official said there had been no breakdown in the negotiations and suggested that a willingness by Iranian negotiators to engage in detailed dialogue about the six nations' proposal was the most useful sign in years.

"There may not have been a breakthrough but there also was not a breakdown," the official, who requested anonymity, said. "Our intention is to proceed," the official added, referring to the powers' commitment to further diplomatic efforts.

Iranian chief nuclear negotiator Saeed Jalili acknowledged a gap in positions between the two sides.

"We proposed our plan of action and the other party was not ready and they asked for some time to study the idea," he told a separate news conference, referring to Tehran's own proposals.

Iran says it is only refining uranium to power a planned network of nuclear energy plants and for medical purposes.

Some diplomats and experts have said Iran's June presidential election fuels uncertainty in the West over the Islamic Republic's strategy for nuclear diplomacy.

The U.S. official did not rule out that new talks could take place before the vote. But first the six powers would have to decide what steps, if any, to take to energize diplomacy.

OPTIONS

Strengthening economic sanctions, which now target Iran's vital oil industry and its banking sector, is one likely option.

"We need to absorb and digest what we heard," the official said. "And decide what makes best sense on the way forward."

Israel's Strategic Affairs Minister Yuval Steinitz warned in a statement that Iran was trying to use the negotiations to gain time to advance its uranium enrichment programme.

"The Iranians are using this round of talks to pave the way to a nuclear bomb," Steinitz said, urging a more aggressive stance to make it "unequivocally clear to the Iranians that the negotiation games are finished."

Shashank Joshi, a senior fellow and Middle East specialist at the Royal United Services Institute, said: "I do not think the risk of war has substantially increased.

"The priority for both sides is to keep the diplomatic track alive until after the Iranian presidential elections."

Ashton said that for the first time there had been a "real back and forth between us when were able to discuss details ... To that extent, that has been a very important element"

But, she added: "What matters in the end is substance."

The six powers tried to persuade Iran to abandon its higher-grade uranium enrichment, as a first step to a broader deal. Refined uranium can be used to power atomic reactors, Iran's stated aim, or provide material for weapons if processed more.

Iran, which denies seeking nuclear weapons, wants major economic sanctions - including on its oil exports and banks - lifted and its right to enrich uranium publicly recognized.

Diplomats said one area where Iranian negotiators appeared willing to cede some ground was the demand that Tehran ship out some of its stockpile of 20 percent uranium, the sensitive product that powers worry represents an important step on route to making weapons-grade material.

One way to address the stocks could be for Iran to speed up conversion of the higher-grade uranium into reactor fuel. But that alone would not allay international concerns.

Jalili said it was Iran's "inalienable" right to refine uranium but that the activity could still be a subject for confidence-building cooperation. He did not elaborate.

The talks were held against a backdrop of flaring tension between big powers and North Korea, which like Iran is defying international demands to curb its nuclear program.

(Additional reporting by Zahra Hosseinian in Zurich, Dmitry Solovyov in Almaty,; Ari Rabinovitch in Jerusalem and Fredrik Dahl in Vienna; Editing by Stephen Powell)

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World powers await Iran's reaction to nuclear offer

By Justyna Pawlak and Yeganeh Torbati

ALMATY (Reuters) - World powers will urge Iran on Friday to accept their offer to ease some economic sanctions if it stops its most sensitive nuclear work, in talks aimed at easing tensions that threaten to boil over into war.

The six powers - the United States, Russia, China, France, Britain and Germany - will meet Iranian negotiators in the Kazakh city of Almaty for the second round of talks this year, aiming to settle a decade-old dispute over Tehran's nuclear work.

With an Iranian presidential election in June complicating decision-making in Tehran, there is little chance of a breakthrough, but Israel has indicted its patience with diplomacy is running out.

Israel has threatened to bomb Iran's nuclear facilities if Tehran does not curb the activities it suspects are aimed at making a nuclear bomb.

Without a conclusive deal in sight, Western diplomats are hoping for at least a serious discussion of specific points of their proposal, made at the last talks in February.

"We hope that Iran comes prepared, makes a substantive and concrete response that really enters into serious ... negotiations to meet the international community's concerns," a senior U.S. administration official said on Wednesday.

Iran has resisted international pressure, arguing its uranium enrichment is for peaceful purposes only and therefore should be allowed to continue, under international law.

Its negotiators arrived in Almaty with their own proposals, the Iranian media reported without giving any details. Chief negotiator Saeed Jalili struck a defiant tone.

"We think our talks tomorrow can go forward with one word. That is the acceptance of the rights of Iran, particularly the right to enrichment," Jalili said in a speech at a Kazakh university.

World powers say Tehran has relinquished that right by hiding its nuclear work from United Nations inspectors in the past and refusing to grant them full access.

Talks were due to start at 10:30 a.m. (0430 GMT) and last through Saturday.

AT ALL COST

If they fail to produce sufficient progress, Western governments are likely impose new economic sanctions, with the double aim of pressuring Tehran while seeking to persuade Israel to hold back from any military action.

In Israel, widely assumed to be the only nuclear power in the Middle East, Prime Minister Benjamin Netanyahu told visiting U.S. senators that Tehran's nuclear work must be stopped.

"We cannot allow a situation in which a regime that calls for our annihilation has the weapons of annihilation. And I think that must be stopped at all cost," he said.

U.S. President Barack Obama sought to cool tempers during a trip to Israel in March, saying diplomacy was the best option, but he alluded to the possibility of last-resort military action.

Experts say Iran would likely seek to keep diplomacy on track ahead of the election, in part to avert new sanctions, but without coming close to any deal.

There is broad unity within the Iranian political establishment on pursuing the nuclear program. Policy on the issue is directed by Ayatollah Ali Khamenei, Iran's supreme leader, rather than by the president.

"The nuclear talks will be affected by the election insofar as the leadership is concerned about maintaining internal stability throughout the election," said Emanuele Ottolenghi, of the Foundation for the Defense of Democracies, a think-tank that has advised the U.S. government on sanctions against Iran.

At the core of the powers' concerns is Iran's enrichment of uranium to 20 percent fissile purity, a level that closes an important technological gap en route to making weapons-grade material.

During the last meeting in Almaty in February the powers told Iran to stop producing such uranium, ship out most of its stockpile and shutter its Fordow facility, buried deep in a mountain near the city of Qom.

In return, they offered to ease a ban on trade in gold and other precious metals and an import ban on Iranian petrochemical products.

(Additional reporting by Dan Williams in Jerusalem; Editing by Robin Pomeroy)

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U.S. official puts onus on Iran in upcoming nuclear talks

WASHINGTON (Reuters) - Progress in this week's nuclear talks between Iran and six major powers in Almaty, Kazakhstan, depends on how Tehran responds to a proposal put forward by the six, a U.S. official said on Wednesday.

The official, speaking on condition of anonymity, told reporters the powers - Britain, China, France, Germany, Russia and the United States - hoped "positive" Iranian rhetoric would be matched by concrete responses and actions by the Iranians.

(Reporting By Arshad Mohammed; Editing by Sandra Maler)

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Iran's nuclear program entails huge costs, few benefits: report

By Yeganeh Torbati

DUBAI (Reuters) - Iran will pursue its nuclear quest although it has reaped few gains from a totem of national pride that has cost it well over $100 billion in lost oil revenue and foreign investment alone, two think-tanks said on Wednesday.

A report by the Washington-based Carnegie Endowment for International Peace and the Federation of American Scientists said Iran's atomic work could not simply be ended or "bombed away" and that diplomacy was the only way to keep it peaceful.

"It is entangled with too much pride - however misguided - and sunk costs simply to be abandoned," the report's authors, Ali Vaez of the International Crisis Group and Carnegie's Karim Sadjadpour, said of Iran's five-decade-old nuclear program, which began under the U.S.-allied shah.

"Given the country's indigenous knowledge and expertise, the only long-term solution for assuring that Iran's nuclear program remains purely peaceful is to find a mutually agreeable diplomatic solution," the report said.

Iran says its nuclear work has medical uses and will produce energy to meet domestic demand and complement its oil reserves.

The United States and other states suspect Iran is covertly seeking a nuclear arms capability. Israel has threatened military action to prevent the Islamic Republic from acquiring atom bombs. Tehran denies pursuing nuclear weapons.

The U.S. and its allies have demanded that Iran curb its enrichment of uranium and have imposed increasingly tough sanctions on Iran's energy, banking and shipping sectors that have cut Iranian oil exports by more than half since 2011.

Iran and six world powers are due to meet in Kazakhstan this week in hopes of finding a solution to the standoff. Their last meeting in February failed to achieve a breakthrough.

The report, entitled "Iran's Nuclear Odyssey: Costs and Risks", seeks to tabulate the opportunity costs of the nuclear program, and puts these at "well over $100 billion" in terms of lost foreign investment and oil revenues.

Relatively small uranium deposits will keep Iran from being fully self-sufficient in nuclear energy, it said, while Tehran has neglected to maintain existing infrastructure and develop other resources that could better secure its energy needs.

For instance, Iran's 1,000-megawatt Bushehr nuclear reactor, which came onstream in 2011 after repeated delays, accounts for just 2 percent of its electricity production, while about 15 percent of "generated electricity is lost through old and ill-maintained transmission lines", the report said.

Iran has vast oil and gas reserves, but sanctions have forced major Western firms to abandon the petroleum sector, making crucial upkeep difficult. Iran's solar and wind energy sectors have also gone undeveloped, the report said.

"No sound strategic energy planning would prioritize nuclear energy in a country like Iran," the report said.

"Instead of enhancing Iran's energy security, the nuclear program has diminished the country's ability to diversify and achieve real energy independence."

The authors recommended that outside powers engage with Iranians through "grassroots public diplomacy" and make clear what they could gain by compromise.

"The Iranian people have been largely absent from the nuclear discussion," they wrote. "While U.S. officials and members of Congress frequently speak of 'crippling sanctions', they rarely impress upon Iranians the concrete costs of their country's nuclear policies and the potentially myriad benefits of a more conciliatory approach."

A lasting deal would have to include commitments by Iran to abstain from activities vital to weapons production, which could give confidence that Iran could continue to enrich uranium to low levels needed for power generation, it said.

"There is virtually no chance that Iran will abdicate what it and many developing countries now insist is a right - a right to enrichment," the report said.

Negotiators should also discuss less politically charged topics such as nuclear safety cooperation and alternative energy options for Iran, "increasing the chances of breaking free of zero-sum games and creating win-win opportunities", it said. (The report can be found at http://carnegieendowment.org/2013/04/02/iran-s-nuclear-odyssey-costs-and-risks/fvui)

(Editing by Alistair Lyon)

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North Korea to restart nuclear reactor in weapons bid

By Jack Kim

SEOUL (Reuters) - The United States has positioned a warship off the Korean coast as a shield against ballistic missile attack as South Korea's new president vowed swift retaliation against a North Korean strike amid soaring tensions on the peninsula.

But Washington also said it had seen no worrisome mobilization of armed forces by the North Koreans despite bellicose rhetoric over a ramping up of international sanctions against Pyongyang over nuclear weapons tests.

"If there is any provocation against South Korea and its people, there should be a strong response in initial combat without any political considerations," South Korean President Park Geun-hye told the defense minister and senior officials.

North Korea says the region is on the brink of a nuclear war in the wake of U.N. sanctions in response to its February nuclear test and a series of joint U.S. and South Korean military drills that have included a rare U.S. show of aerial power.

In Washington, the White House has said the United States takes seriously North Korea's war threats. But White House spokesman Jay Carney said on Monday: "I would note that despite the harsh rhetoric we are hearing from Pyongyang, we are not seeing changes to the North Korean military posture, such as large-scale mobilizations and positioning of forces."

North Korea further escalated its rhetoric on Saturday by saying it was entering a "state of war" with South Korea in response to what it termed the "hostile" military drills.

A U.S. defense official said the USS McCain, an Aegis-class guided-missile destroyer used for ballistic missile defense, was being positioned off the peninsula's southwestern coast.

"This is a prudent move that provides greater missile defense options should (they) become necessary," said the official, speaking on condition of anonymity. The ship was not expected to participate in any exercises, the official added.

South Korea has changed its rules of engagement to allow local units to respond immediately to attacks, rather than waiting for permission from Seoul.

Stung by criticism that its response to the shelling of a South Korean island in 2010 was tardy and weak, Seoul has also threatened to target young North Korean leader Kim Jong-un and to destroy statues of the ruling Kim dynasty in the event of any new attack, a plan that has outraged Pyongyang.

CHINA CALLED TO HELP ENFORCE SANCTIONS

North Korea stepped up its rhetoric in early March, when U.S. and South Korean forces began annual military drills that involved the flights of U.S. B-2 stealth bombers in a practice run, prompting the North to put its missile units on standby to fire at U.S. military bases in South Korea and in the Pacific.

The United States also deployed F-22 stealth fighter jets on Sunday to take part in the drills. The Pentagon said it was the fourth time F-22s had been deployed to South Korea.

Australia, a close U.S. ally and rotating U.N. Security Council member, said it would urge China to help enforce sanctions banning the flow of technology and equipment to North Korea.

Australian Prime Minister Julia Gillard, who leaves on Friday for Beijing, plans to call on Chinese leaders to help bolster stop-and-search provisions for shipping to and from North Korea, Foreign Minister Bob Carr said. Canberra also plans its own banking and financial sanctions.

"The immediate priority is to see the sanctions agreed on by the Security Council are properly enforced," Carr said on Tuesday.

KIM JONG-UN TIGHTENS GRIP ON POWER

North Korea has cancelled an armistice agreement with the United States that ended the Korean War and has cut all hotlines with U.S. forces, the United Nations and South Korea.

At a recent meeting of North Korea's ruling Workers Party Central Committee, leader Kim Jong-un rejected the notion that Pyongyang was going to use its nuclear arms development as a bargaining chip for foreign aid for the impoverished nation.

"The nuclear weapons of Songun Korea are not goods for getting U.S. dollars and they are ... (not) to be put on the table of negotiations aimed at forcing the (North) to disarm itself," KCNA news agency quoted him as saying.

Songun is the Korean word for the "Military First" policy preached by Kim's father who used it to justify the use of the impoverished state's scarce resources to build a 1.2-million strong army and pursue development of weapons of mass destruction.

At the meeting, Kim appointed a handful of personal confidants to the party's politburo, further consolidating his grip on power in the second full year of his reign.

Former premier Pak Pong-ju, a key confidant of the leadership dynasty, was re-appointed to the post from which he was fired in 2007 for failing to implement economic reforms.

Pak, believed to be in his 70s, is viewed as a key ally of Jang Song-thaek, the young Kim's uncle and also a protege of Kim's aunt. Pak is viewed as a pawn in a power game that has seen Jang and his wife re-assert power over military leaders.

Analysts said the move would not likely change North Korea's approach to a confrontation that appears to have dragged the two Koreas closer to war.

(Additional reporting by Paul Eckert, Phil Stewart, David Alexander and Jeff Mason in WASHINGTON; Editing by Will Dunham and Michael Perry)

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Obama pledges resolve against Iran's nuclear aims

JERUSALEM (AP) — Eager to reassure an anxious ally, President Barack Obama on Wednesday promised to work closely with Israel and do whatever is necessary to keep Iran from obtaining nuclear arms, "the world's worst weapons." He also pledged to investigate whether chemical weapons were used this week in neighboring Syria's two-year-old civil war.

Obama, meeting with Israeli Prime Minister Benjamin Netanyahu on his first visit to the Jewish state as president, said of Iran's nuclear ambitions: "We prefer to resolve this diplomatically and there is still time to do so." But he added that "all options are on the table" if diplomacy falls short.

"The question is, will Iranian leadership seize that opportunity," he added. The president said Iran's past behavior indicates that "we can't even trust yet, much less verify."

Netanyahu, at Obama's side for a joint news conference, said that while he appreciated U.S. efforts to thwart Iran's pursuit of nuclear weapons through diplomacy and sanctions, those tools "must be augmented by a clear and credible threat of military action."

"I am absolutely convinced that the president is determined to prevent Iran from getting nuclear weapons," Netanyahu said. "I appreciate that. I appreciate the fact that the president has reaffirmed, more than any other president, Israel's right and duty to defend itself by itself against any threat."

The Israeli leader said that he and Obama agree that it would take Iran about a year to manufacture a nuclear weapon. Obama said there is "not a lot of light, a lot of daylight" between the two leaders in intelligence assessments about Iran, and Netanyahu concurred.

Although preventing Iran from developing a nuclear weapon is a priority of both Israel and the United States, Netanyahu and Obama have differed on precisely how to achieve that.

Israel repeatedly has threatened to take military action should Iran appear to be on the verge of obtaining a bomb. The U.S. has pushed for more time to allow diplomacy and economic penalties to run their course, though Obama insists military action is an option.

Obama also took note of the difficult way forward in the broader quest for Mideast peace, acknowledging that in recent years "we haven't gone forward, we haven't seen the kind of progress that we would like to see."

The president said he came to the region principally to listen, and hoped to return home with a better understanding of the constraints and "how the U.S. can play a constructive role."

"This is a really hard problem," he declared.

Netanyahu, for his part, said he was willing to set aside preconditions in future talks with the Palestinians, adding that it was time to "turn a page in our relations."

On another troubling issue in the region, Obama said the U.S. is investigating whether chemical weapons have been deployed in Syria, and he said he was "deeply skeptical" of contentions by Syrian President Bashar Assad's government that rebel forces were behind any such attack.

Both the Assad government and Syrian rebels have accused each other of using chemical weapons in an attack on Tuesday.

Obama said the U.S. policy not to intervene militarily or arm Syrian rebels thus far is based on his desire to solve the problem with world partners.

"It's a world problem when tens of thousands of people are being slaughtered, including innocent women and children," Obama said.

Obama's visit to Israel, from the start, has been designed to send a message of reassurance to a key ally.

At an extravagant welcoming ceremony, Obama sounded a message that "peace must come to the Holy Land" and that such a goal could not be achieved at Israel's expense. U.S. backing for Israel will be a constant as the Middle East roils with revolution and Iran continues work on its nuclear program, he said.

"The United States is proud to stand with you as your strongest ally and your greatest friend," Obama said after landing at Tel Aviv's Ben Gurion International Airport.

"Across this region the winds of change bring both promise and peril," he said, calling his visit "an opportunity to reaffirm the unbreakable bonds between our nations, to restate America's unwavering commitment to Israel's security, and to speak directly to the people of Israel and to your neighbors."

Seeking to alter a perception among many Israelis that his government has been less supportive of Israel than previous U.S. administrations, Obama declared the U.S.-Israeli alliance "eternal."

"It is forever," he said to applause as Israeli and U.S. flags fluttered in a steady breeze under clear, sunny skies.

Even before leaving the airport for Jerusalem, Obama offered a vivid display of the U.S. commitment to Israeli security by visiting a missile battery that is part of Israel's Iron Dome defense from militant rocket attacks. The United States has invested hundreds of millions of dollars in developing the system with Israel.

Obama and Netanyahu toured the battery, brought to the airport for the occasion. They met and chatted with soldiers who operate the system that Israel credits with intercepting hundreds of rockets during a round of fighting against Gaza militants last November.

Netanyahu, who sparred frequently with Obama over the course of the U.S. president's first term, praised the president.

"Thank you for standing by Israel at this time of historic change in the Middle East," he said. "Thank you for unequivocally affirming Israel's sovereign right to defend itself by itself against any threat."

Obama, who joked that he was "getting away from Congress" by visiting Israel, planned to visit several cultural and religious sites aimed at showing his understanding of the deep and ancient connections between the Jewish people and the land that is now Israel.

He will also meet Palestinian Authority President Mahmoud Abbas in the West Bank and travel to Jordan before returning home on Saturday.

Even though U.S. officials have set expectations low and previewed no major policy pronouncements, a clear measure of the success of Obama's Israel trip will be how much he is able to reverse negative perceptions.

The centerpiece of the visit will be a speech to Israeli university students on Thursday, during which Obama will again renew U.S. security pledges as Israel seeks to counter threats from Iran, protect its people from any spillover in the Syrian civil war and maintain its shaky peace accord with an Egypt that is now controlled by the Muslim Brotherhood.

Obama will visit the cash-strapped Palestinian Authority's headquarters in the West Bank town of Ramallah, where he will meet the embattled Abbas and assure him that an independent Palestinian state remains a U.S. foreign policy and national security priority.

As Israelis warmly greeted Obama, Palestinians held several small protests in the West Bank and Gaza. Demonstrators in the Hamas-ruled Gaza Strip burned posters of Obama and U.S. flags, accusing the U.S. of being biased toward Israel.

In the West Bank, about 200 activists erected about a dozen tents in an area just outside of Jerusalem to draw attention to Israel's policy of building settlements. The tents were pitched in E1, a strategically located area where Israel has said it plans on building thousands of homes. The U.S. has harshly criticized the plan.

Obama will close out his Mideast trip with a 24-hour stop in Jordan, an important U.S. ally, where his focus will be on the violence in Syria. More than 450,000 Syrians have fled to Jordan, crowding refugee camps and overwhelming aid organizations.

In his talks with Jordan's King Abdullah, Obama also will try to shore up the country's fledgling attempts to liberalize its government and stave off an Arab Spring-style movement similar to the ones that have ousted leaders elsewhere in the region.

___

Associated Press writers Mohammed Daraghmeh in Ramallah, West Bank, and Ibrahim Barzak in Gaza City, Gaza Strip, contributed to this report.

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Powers wait to hear Iran response to nuclear offer

ALMATY (Reuters) - World powers hope Iran will respond positively on Wednesday to their new offer to lift some sanctions if Tehran scales back nuclear activity the West fears could be used to build bombs.

The United States, France, Germany, Britain, China and Russia presented the offer when their first meeting with Iran in eight months began in Almaty on Tuesday and the Islamic state was considering it, the powers' spokesman said.

The two sides began a second - and what is expected to be the last in this round of negotiations - day of discussions in the Kazakh city shortly after 11 a.m (0500 GMT) on Wednesday.

Western officials described the first day of the meeting as "useful". One said Iran discussed aspects of the powers' ideas in bilateral talks with three of them - Russia, Germany and Britain - but gave no indication how Tehran viewed them.

Iranian state television described the atmosphere in the discussions as "very serious".

The outcome of the meeting in the Kazakh city will be closely watched in Israel, which has strongly hinted that it could attack Iran's nuclear sites if diplomacy and sanctions fail to stop the uranium enrichment program.

Iran says Israel's assumed nuclear arsenal is the main threat to peace and denies Western allegations it is seeking to develop the capability to make atomic bombs. It says it is only aiming to produce nuclear energy so that it can export more oil.

In their latest attempt to break years of deadlock in the dispute, the powers are offering Iran a relaxation of some of the sanctions that are taking a heavy toll on its economy.

"Hopefully the Iranians will be able to reflect overnight and will come back and view our proposal positively," the spokesman for European Union foreign policy chief Catherine Ashton, who represents the powers in the talks, said.

"The ball is in their court," Michael Mann added after the first day of discussions on Tuesday.

He did not give details of the offer, but other Western officials have confirmed it includes some limited sanctions easing if Iran closes a underground site where it carries out its most controversial uranium enrichment work.

Diplomats see scant chances of a conclusive deal with Iran before a June presidential election - with the political elite preoccupied with domestic issues - but they hope to hold follow-up talks to the Almaty meeting soon.

IRANIAN COUNTERPROPOSAL

Iran would put forward its own proposal of "the same weight" as that of the other side, a source close to the Iranian negotiating team said on Tuesday, but Western officials said it had not done so during the first day of negotiations.

Iran has shown no sign of willingness to scale back its nuclear work. Its chief negotiator, Saeed Jalili, is close to Supreme Leader Ayatollah Ali Khamenei and is a veteran of Iran's 1980s war against Iraq and the Western powers that backed it.

It argues that has a sovereign right to carry out nuclear enrichment for peaceful energy purposes, and in particular refuses to close its underground Fordow enrichment plant, a condition the powers have set for any sanctions relief.

Tightened Western sanctions on Iran over the last 14 months are hurting Iran's economy and slashing oil revenue. Its currency has more than halved in value, which in turn has pushed up inflation.

But analysts say the sanctions are not close to having the crippling effect envisaged by Washington and - so far at least - they have not prompted a change in Iran's nuclear course.

Western officials said the powers' offer would include an easing of restrictions on trade in gold and other precious metals if Tehran closes Fordow.

The facility is used for enriching uranium to 20 percent fissile purity, a short technical step from weapons grade.

Western diplomats acknowledge an easing of U.S. and EU sanctions on trade in gold represents a relatively modest step. But gold could be used as part of barter transactions that might allow Iran to circumvent financial sanctions.

Iran's foreign ministry spokesman last week dismissed the reported incentive as insufficient and a senior Iranian lawmaker has ruled out closing Fordow, close to the holy city of Qom.

(Additional reporting by Yeganeh Torbati in Almaty and Zahra Hosseinian in Zurich; Editing by Robin Pomeroy and Jackie Frank)

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Netanyahu says Iran using nuclear talks to "buy time" for bomb

JERUSALEM (Reuters) - Renewed international efforts to negotiate curbs on Iran's disputed nuclear program have backfired by giving it more time to work on building a bomb, Israeli Prime Minister Benjamin Netanyahu said on Sunday.

His remarks on the inconclusive February 26-27 meeting between Iran and six world powers signaled impatience by Israel, which has threatened to launch preemptive war on its arch-foe, possibly in the coming months, if it deems diplomacy a dead end.

Senior U.S. diplomat Wendy Sherman flew in to brief Israel about the Kazakh-hosted talks, in which Tehran, which denies seeking nuclear arms, was offered modest relief from sanctions in return for halting mid-level uranium enrichment.

There was no breakthrough. The sides will reconvene in Almaty on April 5-6 after holding technical talks in Istanbul.

"My impression from these talks is that the only thing that is gained from them is a buying of time, and through this time-buying Iran intends to continue enriching nuclear material for an atomic bomb and is indeed getting closer to this goal," Netanyahu told his Cabinet in remarks aired by Israeli media.

Extrapolating from U.N. reports on Iran's enrichment of uranium to 20 percent fissile purity, a short technical step from weapons-grade, Netanyahu has set a mid-2013 "red line" for denying the Islamic republic the fuel needed for a first bomb.

Iranian media reported on Sunday the country was building around 3,000 new advanced enrichment centrifuges, a development that could accelerate the nuclear project.

The prospect of unilateral Israeli strikes, and the likely wide-ranging reprisals by Iran and its regional allies, worries Washington, which wants to pursue diplomacy as it winds down costly military commitments abroad.

OBAMA VISIT LOOMS

In an attempt to make their proposals more palatable to Tehran, the United States and five other world powers appeared to have softened previous demands in Almaty - for example regarding their requirement that the Iranians ship out their stockpile of the higher-grade uranium.

A senior Israeli official said that while the Netanyahu government had hoped for a tougher line by the so-called P5+1, it was resigned to awaiting the results of this round of talks.

"At the end of the day, what matters is that the Iranians end their enrichment, whether it's through shutting down their facilities or through more nuanced technical safeguards," the official, speaking on condition of anonymity, told Reuters.

The official would not comment on how or if the latest diplomacy had affected the readiness of Israel, which is widely assumed to have the region's only nuclear arsenal, to go to war.

Iran may have warded off that threat by turning some of its 20 percent-pure uranium into fuel rods for a research reactor.

The international standoff and shifting timelines are expected to dominate U.S. President Barack Obama's trip to Israel later this month. The Israelis urge a tougher posture on Iran from their ally, which has a hefty military presence in the Gulf and says it is poised to use force as a last resort.

Israeli Defense Minister Ehud Barak, in a speech in Washington to the American Israel Public Affairs Committee, echoed Netanyahu in voicing doubt that diplomacy would stop Iran's nuclear ambitions.

"Therefore, all options must remain on the table," he told the pro-Israel lobby group. "We expect all those who say it to mean it. We mean it."

Israel's dovish president, Shimon Peres, sounded more upbeat after meeting Sherman last Thursday. Peres said he had "total faith in the Obama administration, in its commitment and its actions in preventing Iran from developing nuclear weapons".

Obama's Israel visit has been overshadowed by local politics too, given the rightist Netanyahu's failure so far to build a new coalition government after he narrowly won a January 22 ballot.

Appealing to potential party allies to rally to him in the name of national security, Netanyahu told his cabinet: "To my regret this is not happening, and in the coming days I will continue my efforts to unify and galvanize forces ahead of the major national and international challenges that we face."

(Additional reporting by Paul Eckert in Washington; Writing by Dan Williams; editing by Andrew Roche and Christopher Wilson)

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Powers wait to hear Iran response to nuclear offer

ALMATY (Reuters) - World powers hope Iran will respond positively on Wednesday to their new offer to lift some sanctions if Tehran scales back nuclear activity the West fears could be used to build bombs.

The United States, France, Germany, Britain, China and Russia presented the offer when their first meeting with Iran in eight months began in Almaty on Tuesday and the Islamic state was considering it, the powers' spokesman said.

The two sides began a second - and what is expected to be the last in this round of negotiations - day of discussions in the Kazakh city shortly after 11 a.m (0500 GMT) on Wednesday.

Western officials described the first day of the meeting as "useful". One said Iran discussed aspects of the powers' ideas in bilateral talks with three of them - Russia, Germany and Britain - but gave no indication how Tehran viewed them.

Iranian state television described the atmosphere in the discussions as "very serious".

The outcome of the meeting in the Kazakh city will be closely watched in Israel, which has strongly hinted that it could attack Iran's nuclear sites if diplomacy and sanctions fail to stop the uranium enrichment program.

Iran says Israel's assumed nuclear arsenal is the main threat to peace and denies Western allegations it is seeking to develop the capability to make atomic bombs. It says it is only aiming to produce nuclear energy so that it can export more oil.

In their latest attempt to break years of deadlock in the dispute, the powers are offering Iran a relaxation of some of the sanctions that are taking a heavy toll on its economy.

"Hopefully the Iranians will be able to reflect overnight and will come back and view our proposal positively," the spokesman for European Union foreign policy chief Catherine Ashton, who represents the powers in the talks, said.

"The ball is in their court," Michael Mann added after the first day of discussions on Tuesday.

He did not give details of the offer, but other Western officials have confirmed it includes some limited sanctions easing if Iran closes a underground site where it carries out its most controversial uranium enrichment work.

Diplomats see scant chances of a conclusive deal with Iran before a June presidential election - with the political elite preoccupied with domestic issues - but they hope to hold follow-up talks to the Almaty meeting soon.

IRANIAN COUNTERPROPOSAL

Iran would put forward its own proposal of "the same weight" as that of the other side, a source close to the Iranian negotiating team said on Tuesday, but Western officials said it had not done so during the first day of negotiations.

Iran has shown no sign of willingness to scale back its nuclear work. Its chief negotiator, Saeed Jalili, is close to Supreme Leader Ayatollah Ali Khamenei and is a veteran of Iran's 1980s war against Iraq and the Western powers that backed it.

It argues that has a sovereign right to carry out nuclear enrichment for peaceful energy purposes, and in particular refuses to close its underground Fordow enrichment plant, a condition the powers have set for any sanctions relief.

Tightened Western sanctions on Iran over the last 14 months are hurting Iran's economy and slashing oil revenue. Its currency has more than halved in value, which in turn has pushed up inflation.

But analysts say the sanctions are not close to having the crippling effect envisaged by Washington and - so far at least - they have not prompted a change in Iran's nuclear course.

Western officials said the powers' offer would include an easing of restrictions on trade in gold and other precious metals if Tehran closes Fordow.

The facility is used for enriching uranium to 20 percent fissile purity, a short technical step from weapons grade.

Western diplomats acknowledge an easing of U.S. and EU sanctions on trade in gold represents a relatively modest step. But gold could be used as part of barter transactions that might allow Iran to circumvent financial sanctions.

Iran's foreign ministry spokesman last week dismissed the reported incentive as insufficient and a senior Iranian lawmaker has ruled out closing Fordow, close to the holy city of Qom.

(Additional reporting by Yeganeh Torbati in Almaty and Zahra Hosseinian in Zurich; Editing by Robin Pomeroy and Jackie Frank)

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Syrian opposition says captures former nuclear site

AMMAN (Reuters) - Syrian rebels have captured the site of a suspected nuclear reactor which Israeli warplanes destroyed six years ago, opposition sources in eastern Syria said on Sunday.

The site, about 60 km (35 miles) west of the city of Deir al-Zor, became the focus of international attention when Israel destroyed it in 2007. The United States said the complex was a North Korean-designed nuclear reactor geared to making weapons-grade plutonium.

Syria, which razed the site after the raid, said the complex was a regular military facility but refused to allow the International Atomic Energy Agency unrestricted access to the site.

Omar Abu Laila, a spokesman for the Eastern Joint Command of the Free Syrian Army, said the only building rebels found at the site was a hanger containing at least one Scud missile.

"It appears that the site was turned into a Scud launch base. Whatever structures it had have been buried," he said.

(Editing by Janet Lawrence)

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UN nuclear agency documents Iran atom advances

VIENNA (AP) — U.N. nuclear inspectors have counted nearly 200 advanced machines fully or partially installed at Iran's main uranium enrichment site, the International Atomic Energy Agency reported Thursday, confirming diplomats' accounts that Tehran has begun a major upgrade of a program that can be used in the making of atomic arms.

Iran denies it wants such weapons and says it is enriching only to make reactor fuel and for scientific and medical purposes under international law specifically allowing such activities. But because it hid its enrichment program — and other nuclear activities — for decades, many countries fear that it ultimately wants to enrich to weapons-grade level, suitable for arming nuclear warheads.

Iran announced last month that it planned to upgrade its Natanz enrichment facility, then said earlier this month that it had started doing so.

On Wednesday, diplomats told The Associated Press that upward of 100 enriching centrifuges had already been installed.

However, the IAEA report, circulated Thursday to the 35-nation agency board, was the first independent and on-record confirmation that the work had begun and was advancing. The confidential IAEA report, which was leaked to news media, said IAEA inspectors saw 180 of the high-tech IR 2m centrifuges fully or partially mounted at Natanz during a Feb. 6 inspection tour.

The advance is significant both in terms of technology and timing. The IR-2m centrifuges can enrich three to five times faster than the outmoded machines now being used at Natanz. For nations fearing that Iran may want to make nuclear arms that means a quicker way of getting there, should Tehran actually break out of its present peaceful enrichment program to openly work on a weapon.

The start of the upgrade is also of concern to six world powers that are preparing to open talks with Iran about its nuclear program on Tuesday in Kazakhstan. They want Tehran to cut back on enrichment, saying the installation of new machines instead sends the signal that the Islamic Republic is expanding that activity.

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Iran move to speed up nuclear program troubles West

VIENNA (Reuters) - Iran has begun installing advanced centrifuges at its main uranium enrichment plant, the U.N. nuclear watchdog said on Thursday, a defiant step that will worry Western powers ahead of a resumption of talks with Tehran next week.

In a confidential report, the International Atomic Energy Agency (IAEA) said 180 so-called IR-2m centrifuges and empty centrifuge casings had been put in place at the facility near the town of Natanz in central Iran. They were not yet operating.

If launched successfully, such machines could enable Iran to speed up significantly its accumulation of material that the West fears could be used to devise a nuclear weapon. Iran says it is refining uranium only for peaceful energy purposes.

Iran's installation of new-generation centrifuges would be "yet another provocative step," U.S. State Department spokeswoman Victoria Nuland said in Washington.

White House spokesman Jay Carney warned Iran that it would face further pressure and isolation if it failed to address international concerns about its nuclear program in the February 26 talks with world powers in the Kazakh city of Almaty.

The Wall Street Journal reported that the United States was seeking to hold a one-on-one meeting with Iran in Almaty in a bid to accelerate the nuclear diplomacy ahead of Iran's presidential elections in June.

A U.S. official, who spoke on condition of anonymity, noted that the United States had often made clear that it was willing to talk to Iranian officials on the sidelines of such talks but declined to say whether it wanted a meeting next week.

Britain's Foreign Office said the IAEA's finding was of "serious concern". Israeli Prime Minister Benjamin Netanyahu's office said the report "proves that Iran continues to advance swiftly towards the red line" that he laid down last year.

Netanyahu, who has strongly hinted at possible military action if sanctions and diplomacy fail to halt Iran's nuclear drive, told the United Nations in September Iran must not be allowed to amass enough higher-enriched uranium to make even a single warhead.

Iran denies Western accusations that it is seeking to develop a capability to make atomic bombs. Tehran says it is Israel's assumed nuclear arsenal that threatens peace.

Iran's envoy to the IAEA, Ali Asghar Soltanieh, told Iranian media the U.N. agency's report showed "no evidence of diversion of material and nuclear activities towards military purposes."

U.S. lawmakers meanwhile are crafting a bill designed to stop the European Central Bank from handling business from the Iranian government, a U.S. congressional aide said on Thursday, in an attempt to keep Tehran from using euros to develop its nuclear program.

In the early stages of drafting, it would target the ECB's cross-border payment system and impose U.S. economic penalties on entities that use the European Central Bank to do business with Iran's government, the aide said on condition of anonymity.

The aide disclosed the new push for sanctions ahead of fresh talks on Tuesday in which major powers hope to persuade the Iranian government to rein in its atomic activities, which the West suspects may be a cover to develop a bomb capability.

RISING WESTERN PRESSURE

It was not clear how many of the new centrifuges Iran aims to install at Natanz, which is designed for tens of thousands.

An IAEA note informing member states late last month about Iran's plans implied that it could be up to 3,000 or so.

Iran has for years been trying to develop centrifuges more efficient than the erratic 1970s IR-1 model it now uses, but their introduction for full-scale production has been dogged by delays and technical hurdles, experts and diplomats say.

The deployment of the new centrifuges underlines Iran's continued refusal to bow to Western pressure to curb its nuclear program, and may further complicate efforts to resolve the dispute diplomatically, without a spiral into Middle East war.

Iran has also started testing two new centrifuge types, the IR-6 and IR-6s, at a research and development facility, the IAEA report said. Centrifuges spin at supersonic speed to increase the ratio of the fissile isotope in uranium.

In a more encouraging sign for the powers, however, the IAEA report said Iran in December resumed converting some of its uranium refined to a fissile concentration of 20 percent to oxide powder for the production of reactor fuel.

That helped restrain the growth of Iran's higher-grade uranium stockpile since the previous report in November, a development that could buy more time for diplomacy.

The report said Iran had increased to 167 kg (367 pounds) its stockpile of 20 percent uranium - a level it says it needs to make fuel for a Tehran research reactor but which also takes it much closer to weapons-grade material if processed further.

NEW OFFER TO IRAN

One diplomat familiar with the report said this represented a rise of about 18-19 kg since November, a notable slowdown from the previous three-month period when the stockpile jumped by nearly 50 percent after Iran halted conversion.

Israel last year gave a rough deadline of mid-2013 as the date by which Tehran could have enough higher-grade uranium to produce a single atomic bomb if processed further. Experts say about 240-250 kg of 20 percent enriched uranium would be needed.

But a resumption of conversion, experts say, means the Israeli "red line" for action could be postponed.

Refined uranium can fuel nuclear energy plants, which is Iran's stated aim, or provide the core of an atomic bomb, which the United States and Israel suspect may be its ultimate goal.

Next week's talks between the six powers and Iran to try again to break the impasse in the decade-old dispute are their first since mid-2012, but analysts expect no real progress toward defusing suspicions that Iran is seeking atomic bomb capability.

The United States, Russia, China, France, Britain and Germany want Iran to halt 20 percent enrichment and shut the Fordow underground plant where this takes place.

Iran wants them to recognize what it regards as its right to refine uranium for peaceful purpose and to relax increasingly strict sanctions battering its oil-dependent economy.

In Paris, French deputy foreign ministry spokesman Vincent Floreani said the powers were ready to make a new offer to Iran with "significant new elements" and that they hoped Tehran would engage seriously in the negotiations.

(Additional reporting by John Irish in Paris,; Zahra Hosseinian in Zurich,; Rachelle Younglai, Arshad Mohammed and Matt Spetalnick in Washington and Paul Carrel in Frankfurt; Editing by Roger Atwood and David Brunnstrom)

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