Robert Gates and Ehud Barak at the Pentagon on September 20, 2010.
U.S. Defense Secretary Robert Gates and Defense Minister Ehud Barak at the Pentagon on Monday, September 20, 2010. Photo by AP
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Defense Minister Ehud Barak said late Monday that "sanctions might not suffice" in curbing Iran's contentious nuclear program, telling Fox News that the Islamic Republic could theoretically have atomic warheads within two years.

"Sanctions might not suffice and we have to start to consider what follows if sanctions won't work," said the defense minister. "Technically, probably they can reach it within a year and a half or two, if they decide to break all the rules. Probably it might take a little bit longer, but the real challenge is that beyond [a] certain point in time, whether they reach [a] nuclear bomb, or cannot reach it, they will become immune against any kind of attack because of the redundancy within their systems."

Barak was visiting Washington at the time of his interview, for talks with high-level U.S. officials including Secretary of State Hillary Clinton and Defense Secretary Robert Gates.

"I don’t believe sanctions alone would work, but it's too early to put any further steps into concrete terms," he told the U.S. news network. "Basically we believe that no option should be removed from the table. We recommend this policy to friends and I believe that it becomes more and more accepted by leading players around the world."

"Not just for Israel - I believe that even for this administration, for this country, it will part of the way history will judge this period, this administration when it comes to the end of its term whether Iran turned nuclear under this administration's watch or not," he added.

Barak's comments came just hours after U.S. President Barack Obama said that Iran having a nuclear weapon would be a "real problem" but he did not think military action by Israel or the United States was the "ideal way" to solve the crisis.

The United Nations Security Council, along with the United States and the European Union, has imposed tougher sanctions on Iran, which has defied international calls for it to halt uranium enrichment.

Iran says it needs the enriched uranium for the peaceful generation of electricity, but the United States and its allies, including Israel, fear Tehran's nuclear program is a cover to build an atomic bomb.

"We continue to be open to diplomatic solutions to resolve this," Obama told a town-hall style meeting on CNBC. "We don't think that a war between Israel and Iran or military options would be the ideal way to solve this problem."

But Obama too, said that the U.S. is "keeping all our options on the table."

Meanwhile, a senior U.S. official said on Tuesday he did not rule out a resumption of talks on a stalled nuclear fuel swap with Iran, but made clear Tehran must also engage on broader concerns about its disputed nuclear program.

Iran's nuclear energy chief had urged major powers on Monday to restart talks on the plan to provide fuel to a Tehran medical reactor in exchange for some of its low-enriched uranium (LEU) stockpile -- potential bomb material if refined to a high level.

But U.S. Deputy Energy Secretary Daniel Poneman said "the facts on the ground" had changed since a tentative agreement on the issue struck last year, only to crumble soon afterwards.

He was referring to Iran's effort to enriched uranium to a higher grade andboost its reserves of the strategic material.

"I'm not ruling anything in or out," he told reporters when asked about Monday's call by Ali Akbar Salehi at the annual assembly of the International Atomic Energy Agency (IAEA).

"They had an offer before them. They did not respond favorably to the offer. The facts on the ground have changed. They need to do something," said Poneman, who took part in last year's fuel negotiations with Iran.

"We believe it is very important that they should engage on the wider sweep of issues," he added, alluding to talks between Iran and six world powers last year that were aimed at yielding a halt to Iran's secretive enrichment activity in exchange for trade and diplomatic benefits, but stalled.

"We need to make sure that any engagement is in the context of that changed reality and the wider security requirements..."

Western diplomats voice concern that even if Iran re-enters negotiations about an exchange of atomic fuel, it may still refuse to address broader issues of peaceful guarantees and transparency regarding its nuclear program.

The Islamic Republic has repeatedly rejected international demands to shut down all enrichment-related activities, saying it has a sovereign right to atomic energy, and has refused to provided unfettered access for U.N. nuclear inspectors.

Enriched uranium can fuel nuclear power plants or, if refined to a high level of purity, provide bomb material.

Energy Secretary Steven Chu, addressing the same news conference, said: "We are always interested in re-engaging Iran but...we want to make sure Iran is sincere about these talks."

Last October, the United States, France and Russia brokered a deal with the UN nuclear watchdog which at the time would have divested Iran of 70 percent of its LEU stockpile in return for fuel for the medical reactor helping cancer patients.

Regarded at the time by world powers as a prospective confidence-building step as Iran would ship out material which could be used to make a bomb, the deal fell apart after Tehran backed away from the initial terms for an atomic fuel swap.

Western officials have questioned the value of doing this swap now, as Brazil and Turkey have suggested, because Iran has since more than doubled its LEU stockpile and started higher enrichment, a further potential step towards arms-grade uranium.