U.K. cuts business with Iran firms suspected of nuclear ties

Britain froze business ties with an Iranian bank and state-run shipping firm on Monday, citing fears that they were involved in helping the Islamic Republic to develop nuclear weapons.

Iran dismissed the move and a separate U.S. warning that major powers would not wait forever for Tehran to prove it was not developing nuclear bombs, saying any threats or deadlines would have no impact

The freeze targets Bank Mellat and Islamic Republic of Iran Shipping Lines, both of which have previously faced sanctions from the United States. The U.S. Treasury welcomed the action, calling it a step forward in protecting the financial system.

Making an order under counter-terrorism laws rather than UN sanctions, Britain said it was convinced that Iran's disputed nuclear programme was a threat to its security.

"The Treasury is satisfied, as required by the Act, that activity in Iran that facilitates the development or production of nuclear weapons poses a significant risk to the national interests of the U.K.," Treasury minister Sarah McCarthy-Fry said in a written statement to parliament.

The Treasury said it welcomed recent talks between Iran and six world powers, including Britain, but said that action was needed now against the two businesses, accusing them of links to nuclear weapons and ballistic missile programs.

Asked about the timing of the move, a Treasury spokesman said "When the government identifies such activities, it is committed to curtailing them."

The action follows criticism of Iran from U.S. Secretary of State Hillary Clinton and British Foreign Secretary David Miliband at a news conference in London on Sunday.

Iran, which says its nuclear work is for peaceful electricity generation, agreed at a meeting in Geneva on Oct. 1 to allow UN inspectors access to a newly disclosed uranium enrichment plant near the city of Qom.

The Islamic state has repeatedly rejected demands to halt its sensitive nuclear work, despite three rounds of U.N. sanctions since 2006. Progress in the Geneva talks was seen as heading off calls for an immediate round of tougher sanctions.

Iran dismisses U.S. warning ahead of key nuclear talks

Iran dismissed on Monday a U.S. warning that major powers would not wait forever for Tehran to prove it was not developing nuclear bombs, saying any threat of deadlines would have no impact on the Islamic Republic.

Foreign Ministry spokesman Hassan Qashqavi, speaking a week before a meeting in Vienna on a proposal to send Iranian uranium abroad for further processing, also reiterated Iran's refusal to discuss its "nuclear rights" with the six world powers.

"We have announced several times that we have nothing to discuss about that," he told a news conference in comments translated by Iran's state Press TV.

"That means continuation of our activities within the framework of the nuclear Non-Proliferation Treaty and the safeguards agreement of the IAEA and enrichment on that basis," he said, referring to the UN nuclear agency watchdog.

Such comments by Qashqavi are likely to fuel Western suspicions that Iran is seeking to win time by engaging for the sake of engaging while further mastering enrichment technologies.

Western diplomats believe Iran is trying to show enough flexibility to keep trade allies Russia and China opposed to painful energy sanctions which could target its energy sector.

The West suspects Iran is seeking to develop nuclear bombs. Tehran says its atom work is aimed at generating electricity.

In London on Sunday, UClinton said: "The international community will not wait indefinitely for evidence that Iran is prepared to live up to its international obligations."

Asked about the remark, Qashqavi said: "If there is a deadline or any kind of threat in their comments, they will not impact us in any way."

In talks that both sides have described as constructive, Iran agreed at a meeting with the six powers - the United States, Russia, China, France, Germany and Britain -- in Geneva on October 1 to allow U.N. experts access to a newly disclosed uranium enrichment plant near the city of Qom.

Fuel deal?

Western diplomats say Iran also agreed in principle to send about 80 percent of its stockpile of low-enriched uranium to Russia and France for processing and return to Tehran to replenish dwindling fuel stocks for a reactor in the capital that produces isotopes for cancer care.

Iranian, Russian, French, U.S. and U.N. nuclear energy agency officials will meet in Vienna on Oct 19 to flesh out conditions, such as amounts of uranium to be sent abroad.

"There are 150 hospitals dependent on this reactor ... we want to receive this fuel from outside. That's why we are going to have the meeting and we hope that we'll reach an agreement," Qashqavi said.

But, in line with comments by a spokesman for Iran's Atomic Energy Organisation, he also suggested Iran could provide the fuel itself if there was no agreement on external supply.

Any suggestion that Iran may embark on further refining uranium is likely to add to concern among Western powers.

Enriched uranium can be used as fuel for power plants and, if refined much more to about 90 percent, provide material for bombs. Iran needs uranium refined to a purity of 20 percent for its Tehran reactor, from the 3.5 percent it has now.

For world powers, the fuel deal's payoff would be in diminishing Iran's stash of low-enriched uranium, enough to fuel one atomic bomb should Tehran choose to enrich it further.

For Iran it would preserve medical isotope production.

Tehran has repeatedly rejected demands to halt enrichment, despite three rounds of U.N. sanctions since 2006.

Progress in the Geneva talks was seen as heading off calls for an immediate round of tougher sanctions in the near future.