Introduction

Iran's interest in nuclear technology dates back to the U.S. Atoms for Peace program. In the 1950s, the Shah initiated Iran's nuclear research program and developed an ambitious plan to produce 23,000MW from nuclear power by the end of the century. However, this plan was stalled by the Islamic revolution in 1979, and during the ensuing eight-year war with Iraq through most of the 1980s. Iran’s nuclear program was revived later in the decade, when strategic interests began to drive the nuclear program, and beginning with the 1990s grew steadily on all fronts and stages of the nuclear fuel cycle, with a particular emphasis on developing and strengthening indigenous capabilities.

Iran’s nuclear program has been a source of concern and scrutiny for some time. With the revelations of previously unreported facilities and activities in Iran and the international community’s concerns with Iranian intentions, the International Atomic Energy Agency (IAEA) continues to be actively engaged in verifying the true nature of Iran’s nuclear program. The most alarming developments vis-à-vis Iran’s nuclear program were revealed in 2002 to 2003, during which time Iran admitted to having construction plans for two enrichment facilities, a heavy water production plant, a fuel fabrication plant, and undertaken research into conversion and enrichment activities (including centrifuges and possibly lasers). On 19 August 2003, Iran began testing a ten-machine cascade at the Pilot Fuel Enrichment Plant (PFEP) at Natanz with uranium hexafluoride (UF6). (After announcing on 21 October 2003 that it would cooperate with the IAEA, Iran signed the Additional Protocol to the NPT on 18 December.) All of Iran's research activities in the recent past undoubtedly contribute to the future development of a complete nuclear fuel cycle, which in turn would enable Iran to produce fissile material for nuclear weapons without relying on outside assistance.

Iran continued its voluntary suspension of uranium conversion activities until August of 2005, when nuclear activities resumed at the Isfahan Uranium Conversion Facility. Iran motivated the resumption by its dissatisfaction with the progress of negotiations with the European Union and the content of the 2005 proposal for long-term cooperation prepared by the EU/E3 (United Kingdom, France, Germany). In February 2006, Iran resumed its enrichment activities. On 24 September 2005, the IAEA found Iran in non-compliance with its Safeguards Agreement, and the UN has since passed several Security Council (SC) resolutions requesting Iran to stop its enrichment and reprocessing related work. Tehran refuses to comply, insisting that the nuclear fuel cycle is its inalienable right under the NPT, and continues to operate the Fuel Enrichment Plant (FEP) and Pilot FEP (PFEP) at Natanz.

Iran appears to be dangerously close to developing an indigenous nuclear fuel cycle, which would in turn enable it to develop a nuclear bomb without much reliance on outside help. Comparison with the other nuclear axis member North Korea is tempting, but inappropriate. Iran is motivated by its aspirations for political, religious, and military leadership in the region, unlike North Korea, for whom mere survival appears to be the priority. Iran has traditionally felt insecure among its neighbors, first vis-à-vis Iraq, whom it considered its most immediate physical and ideological threat, and now that the Hussein regime is gone, the growing presence and influence of the United States. Additionally, the constant threat of Israel's nuclear arsenal, mostly perpetuated by Iran's technocrats, government officials and the pro-nuclear lobby, adds to Iran's perceived concerns and justifies to the domestic audience the need to develop nuclear weapons.

Iran's progress toward nuclear weapons, though irreversible, might be hampered by a combined effort on three fronts. First, an unlikely but not impossible development would be an emergence of a domestic opposition to nuclear weapons, potentially within President Khatami's reformist government. A second front would come in the form of intense international pressure on states that are still in the position to help Iran perfect its knowledge and infrastructure—Russia, Pakistan, China, and North Korea. A third approach might be a regional effort on the part of Arab states to pressure Iran to abandon sensitive technology and questionable activities in favor of a nuclear-weapons-free zone in the Middle East.

In June 2008, the P5+1 states renewed their 2006 offer to Iran that includes several incentives, among them cooperation in the field of civilian nuclear energy applications, if Tehran would suspend its uranium enrichment activities. As of July 2008, the negotiations remain ongoing.

History

Although Iran began developing its nuclear program in the 1950s, it was slow to progress until late in the 1960s, when the U.S.-supplied 5MW thermal research reactor (TRR) went online at the Tehran Nuclear Research Center (TNRC). In 1973, spurred by an influx of oil revenues, the Shah of Iran embarked on an ambitious goal of modernizing the country and building its image abroad. He did this by shifting the country's budgets toward the military and the newly established Atomic Energy Organization of Iran (AEOI). The Shah set his goal high: "...get, as soon as possible, 23,000MWe from nuclear power stations."[1] In 1968, Iran signed the NPT in an effort to speed up its negotiations for nuclear agreements, particularly with the United States. This was ratified in 1970 and its obligations went into force.

In the five years that followed, Iran concluded several contracts for the construction of nuclear plants and the supply of nuclear fuel: with the United States in 1974; Germany in 1976; and France in 1977. In 1976, Iran also purchased a stake in Eurodif's (the European consortium) Tricastin uranium enrichment plant in France and purchased a stake in the RTZ uranium mine in Rossing, Namibia. Also in 1976, the government signed a $700 million contract to purchase uranium yellowcake from South Africa and sent Iranian technicians abroad for training in nuclear sciences.

In addition to his grand plans for nuclear power, the Shah placed a great emphasis on establishing and developing a nuclear research program. The scientists at the AEOI's newly equipped TNRC were reportedly given great discretion regarding the nature and direction of experiments conducted. According to former head of AEOI, Akbar Etemad, the Shah's interest in nuclear technology did not involve military applications, in fact the Shah "considered it absurd, under the existing circumstances, to embark on anything else but a purely civilian program."[2]

However, according to recently revealed documents discovered in Tehran after the revolution, in the late 1970s Iran and Israel discussed a plan to modify Israel's surface-to-surface Jericho missiles for use by Iran—missiles that could be equipped with nuclear weapons. And, despite Akbar Etemad's beliefs, the Western intelligence community had long suspected that the Shah's nuclear scientists conducted research into military applications. Suspected activities at the TNRC include nuclear weapons design, plutonium extraction, and laser-enrichment research. By the time of the Islamic Revolution in January 1979, Iran's nuclear program was considered one the most advanced in the Middle East.

In the immediate aftermath of the revolution, Iran's ambitious nuclear program fell apart due to the initial opposition by the Khomeini government to nuclear technology and because of the exodus of many of Iran's nuclear scientists. Additionally, the insufficiency of the existing electrical infrastructure and dwindling oil revenues contributed to the withdrawal of foreign suppliers from Iran and the abandonment of nuclear cooperation agreements. Iran's only nuclear power plants in 1979 were the two plants under construction at Bushehr, under contract with Germany's Siemens. The weapons research side of Iran's nuclear activities seemed to have continued uninterrupted by the revolution, and received a major boost when a new nuclear research center opened at Isfahan in 1984.

From its inception, the revolutionary government was forced to face external challenges in addition to domestic instability. Invasion by Iraq and the loss of Iran's powerful ally, the United States, must have contributed to Iran's sense of political and military vulnerability. Eight years of war with Iraq, multiple bombings of the Bushehr reactor site, chemical attacks on its forces, missile strikes on its cities, and an overall drain on its resources would certainly have had a devastating effect on Iran. In addition to feeling threatened by Iraq's growing nuclear program, these attacks may explain why the Khomeini government ultimately resumed its efforts to continue Iran's nuclear power program and strengthen its existing nuclear research program—and ultimately to develop nuclear weapons.

As the Cold War ended, the strategic environment around Iran changed. After the 1979 hostage crisis at the U.S. embassy in Tehran, the United States withdrew its support from Iran, cut all nuclear cooperation agreements, and supported Iraq during the war. China, North Korea, and, to a certain extent, Syria emerged as major suppliers of conventional arms to Iran. Help from China and North Korea, however, was not limited to conventional weaponry. By this time, Iran was looking for a new bidder to complete the Bushehr project. The late 1980s saw a rise of several new potential exporters of nuclear assistance.

Pakistan and China signed long-term nuclear cooperation agreements with Iran in 1987 and 1990, respectively. Accords with both countries involved training personnel, and in the case of China, included an agreement to provide Iran with a 27KW miniature neutron source reactor (MNSR) and two 300MW Qinshan power reactors. Western intelligence suspected that Pakistan, which many estimated had succeeded in manufacturing a nuclear bomb in 1986, provided Iran with nuclear assistance. Reports in the Western press and leaks from Western government and intelligence sources indicated that Pakistan had trained Iranian scientists in plutonium extraction and possibly gas centrifuge enrichment research. Training was most likely carried out under the direction of Abdul Qadeer Khan, former director of the Engineering Research Laboratories, later renamed the Dr. A.Q. Khan Research Laboratories (Kahuta), where Pakistan's nuclear weapons research and enrichment takes place. A.Q. Khan is widely regarded as the father of Pakistan's nuclear bomb.

The Soviet Union, traditionally an ally of Iraq, had also indicated an interest in cooperating with Iran. In 1990, the Soviet Union and Iran began negotiating over the completion of the Bushehr reactors and the supply of additional nuclear plants. In January 1995, the Russian Federation formally announced that it would complete the construction of the Bushehr reactors and signed an agreement with Iran to build three additional reactors at the site. Since the signing of these agreements, the United States has continuously expressed its opposition to the Bushehr deal because of fears that the deal could provide Iran with knowledge and technology to support a nuclear weapons program. Despite many technical delays (incompatibility of original Siemens equipment with Russian technology) and efforts by the United States to stall the project, frequently by lobbying the Russian government for the cancellation of the deal, most notably during the Gore-Chernomyrdin Commission meetings, the facility is nearing completion.[3] Over the years, the United States has successfully blocked several of Iran's nuclear agreements, such as those with Argentina (uranium enrichment and heavy water production facilities), China (plutonium-producing research reactor, two power reactors and a uranium conversion plant), and Russia (heavy water production plant).

In 1995, it became evident that Iran may be pursuing nuclear weapons through another track: by procuring dual-use items from Western firms. The United States also learned that Iran and Russia had concluded a secret protocol stipulating, among other things, construction of a gas centrifuge enrichment facility. The fear was that Iran might learn how to construct a similar clandestine facility and then produce weapons-grade uranium undetected. The United States then imposed extensive sanctions on Iran and successfully pressured Russia and other potential suppliers, mostly in Europe, to halt exports of sensitive dual-use technology to Iran, such as high-voltage switches that could trigger a nuclear weapon and specialized remote manipulators designed to handle heavy volumes of radioactive material and possibly intended for a uranium or plutonium reprocessing plant. Russia agreed to scale down its nuclear cooperation with Iran, cancelling the projects on the construction of light-water research reactor, nuclear power desalination plant, and the sale of laser enrichment equipment. [4]

In mid-2002, a Paris-based opposition group, the National Council of Resistance of Iran (NCRI), revealed the existence of two previously unknown facilities—a uranium enrichment facility at Natanz and a heavy water production plant at Arak. Following the discovery of substantial reserves of uranium ore at Saghand, Yazd province, Iran announced that it was developing a nuclear power plan that would rely solely on indigenous resources. In a statement at the IAEA in September 2002, President of AEOI Golamreza Aghazadeh said Iran was embarking on a long-term plan “to construct nuclear power plants with a total capacity of 6,000 MW … and associated technologies such as fuel cycle, safety and waste management.” [5] These developments greatly alarmed the Western intelligence community. An enrichment and heavy water production capability along with domestic resources of uranium would significantly contribute to the development of a closed nuclear fuel cycle in Iran.

Recent Developments and Current Status

Upon visiting the suspected facilities in February 2003, and with new declarations by Iran, the International Atomic Energy Agency (IAEA) concluded that several sensitive technology facilities were either operational, under construction, or planned. The IAEA raised questions regarding possible enrichment activities at the workshops of the Kalaye Electric Company relating to production of centrifuge components. Additionally, Iran admitted to having imported from China 1.8 tons of nuclear material (UF6, UF4, and UO2) used to manufacture uranium metal, which is essential in weapons production. During its meetings with IAEA officials in August 2003, Iran for the first time provided evidence of technical violations of its Safeguards Agreement by revealing that in the 1990s, it had carried out 113 uranium conversion experiments involving the production of uranium metal from imported UF4 and the production of UF4 from imported UO2, as well as laboratory-scale experiments in the 1980s involving the production of heavy water.

During the IAEA inspection in June 2003, environmental samples that were taken from chemical traps of the Pilot Fuel Enrichment Plant at Natanz revealed the presence of highly enriched uranium (HEU). Short of declaring Iran in violation of the NPT, the IAEA Director-General Mohamed El-Baradei stated, "Iran has failed to meet its obligations under its Safeguards Agreement"[6] and criticized Iran for not being transparent with the construction of its nuclear-related facilities and import of nuclear material. The IAEA Board of Governors imposed a 31 October 2003 deadline on Iran to resolve all outstanding issues and to provide full and complete declaration of its nuclear material and nuclear activities, specifically Iran's enrichment program and past conversion experiments. It further called on Iran to suspend all enrichment activities and sign an Additional Protocol.[7]

In an effort to diffuse the tense relations between Iran and the IAEA and to preserve the sanctity of the nonproliferation regime, foreign ministers of Britain, France, and Germany secured Iran's consent to cooperation with the IAEA ahead of the 31 October deadline. Faced with the probability of sanctions and international isolation in case of noncompliance with the IAEA's demands, Iran announced on 21 October 2003 that it would cooperate with the IAEA with full transparency and disclosure, sign the Additional Protocol and commence its ratification procedures, and suspend all enrichment and reprocessing activities, albeit for an "interim period." On 18 December 2003, Iran signed the Additional Protocol to the Safeguards Agreement, thus allowing snap inspections of its nuclear facilities by IAEA experts. Ali Akbar Salehi, the outgoing Iranian representative to the IAEA, signed on behalf of Iran, and Director-General El-Baradei signed for the IAEA.[8]

Iran has not yet ratified the Additional Protocol (AP) but started to act in accordance with the AP in spring 2004, which allowed the IAEA greater access within Iran and an opportunity to carry out intrusive inspections at Iran's nuclear facilities.[9] Subsequent IAEA inspections in Iran revealed a wealth of new information related to the development and scale of Iran's nuclear program. Iran is generally viewed as having been forthcoming and helpful to these IAEA efforts, although this cooperation has clearly not been absolute. Indeed, on 18 June 2004, IAEA board members voted to reprimand Iran for not providing the agency with more timely and comprehensive support. Specifically, Iran was rebuked for postponing IAEA visits to a number of locations related to Iran's P-2 centrifuge enrichment program, which had been scheduled to take place in March 2004.[10] The IAEA also criticized Iran's lack of forthrightness about its possession of P-2 design drawings and other related research, and information regarding its manufacturing and mechanical testing activities, all of which was omitted from Iran's 21 October 2003 declaration to the agency.[11] The IAEA called on Iran to "be proactive in taking all necessary steps on an urgent basis to resolve all outstanding issues", including those related to contamination by low-enriched uranium (LEU) and HEU, as well as the limited production of polonium-210 and plutonium.[12]

Concurrently, the United States along with some other IAEA board members continued to maintain that Iran is pursuing an underground nuclear weapons program. And while this claim has not yet been substantiated by IAEA inspectors, proponents argue that Iran has violated the NPT and that the country's nuclear file should, in turn, be referred to the United Nations Security Council (UNSC) for its review. El-Baradei is, however, weary of pursuing such a hard line against Iran, as he fears that exerting too much pressure may cause Iran to opt out of the NPT altogether.[13] Responding to the barrage of critics who insist that Iran's illicit intentions are obvious, El-Baradei has pointed to the continued absence of a "smoking gun" and the fundamental shortcomings of attempts to concretely assess Iran's programmatic goals without such evidence. As he stated in July 2004, "We are not God. We cannot read intentions."[14] For its part, Iran continues to assert that it pursues a nuclear program with only peaceful applications, while El-Baradei is steadfast in his belief that the situation may be resolved diplomatically.[15] In addition, Russia remains unequivocally opposed to United Nations' sanctions against Iran, especially given the absence of evidence to bolster claims about illicit activities. Russia has also supported Iran's disclosure efforts, despite Russian President Vladimir Putin's November 2003 charge that Iran acted in bad faith by failing to fully comply with IAEA inspections.[16]

In an effort to bring Iran into compliance with its international obligations, representatives from Britain, France, and Germany, including the EU High Representative for the Common Foreign and Security Policy entered into negotiations with Iran with a view towards developing long-term solutions. In November 2004, E3/EU and Iran concluded the Paris Agreement reaffirming Iran's commitment to uphold its obligations under the NPT, yet recognizing its right to pursue nuclear technologies for peaceful purposes.

U.S. officials, dissatisfied with the agreement, continued to pressure the international community to pursue more stringent investigations of Iran's nuclear program. In late November 2004, a CIA report revealed Iranian involvement with Pakistani nuclear scientist A.Q. Khan, and details regarding the nuclear assistance and technology he shared.

On 29 November 2004, the IAEA Board of Governors adopted a resolution on the implementation of Safeguards Agreement in Iran welcoming Iran’s decision to voluntarily suspend conversion and enrichment activities and requested the Director General to continue his investigations. In view of the resolution the Iranian government repeatedly declared that Iran did not intend to completely abandon its nuclear program viewing the suspension as only temporary.

On 2 December 2004, IAEA inspectors sought access to two secret Iranian military sites where the main Iranian opposition group alleged nuclear activities had been taking place: Parchin and Lavizan II. U.S. intelligence data indicated explosives testing and the purchase of equipment that may be used for uranium enrichment.

In March 2005, Iran refused IAEA inspectors a second visit to Parchin, a military site suspected of nuclear activity, stating that another visit was not justified. This has hindered the atomic agency's ability to complete its investigation into Iran's centrifuge equipment and the source of nuclear contamination detected during earlier visits. Results of January 2005 inspections to five other nuclear sites revealed nothing suspicious.

Amid rising concerns about Iran's insistence on its right to enrich uranium and inwardly revised estimates of its ability to build a nuclear bomb, the possibility of Israeli and/or American plans to mount an attack on Iranian nuclear sites "a la Osirak" received extensive treatment in the press in the first few months of 2005. Officials from both nations denied the rumors of an impending attack.

Concurrent with Iran's negotiations with E3/EU, Iranian nuclear official Ali Akbar Salehi asserted on 22 April 2005 that Iran's plan to achieve full mastery of the nuclear fuel cycle was "completely clear and irreversible." This ambition had elicited widespread international criticism. In a "message" to Iran, on 26 April the United States approved the sale to Israel of "bunker buster" bombs capable of penetrating Iran's underground nuclear facilities.

On 1 August 2005, Iran notified the IAEA of its decision to resume uranium conversion activities at its conversion facility at Esfahan. This decision to resume uranium conversion was seen as a breach of the November 2004 Paris Agreement that stipulated that Iran’s suspension of all enrichment and reprocessing related activities was “essential” for the continuation of negotiations. In September 2005, the IAEA Director General’s report to the Board of Governors confirmed Iran’s resumption of uranium conversion activities and presented new findings. The findings were in two major areas, one related to the origin of the low enriched uranium and highly-enriched uranium contamination found at various locations in Iran and the second, related to the P-1 and P-2 centrifuge program. The report used strong language, urging Iran to adopt greater transparency measures vis-à-vis their nuclear program. On 24 September 2005, the IAEA passed a resolution finding Iran in non-compliance with its Safeguards Agreement. The resolution was adopted with 21 votes of approval, 12 abstentions, and one opposing vote. Russia and China were among those that abstained, and Venezuela was the only country to vote against the resolution. The resolution stated that Iran's non-compliance due to "many failures and breaches" over nuclear safeguards of the NPT were grounds for referral to the UN Security Council.

On 4 February 2006, the 35-nation board of the IAEA voted to report Iran to the Security Council over its decision announced in January, to restart nuclear research. The above resolution passed with 27 votes of approval, five abstentions, and three opposing votes. This was the first time that Russia and China agreed to go along with the position of the EU-3 and the United States over Iran. However, Russia and China insisted on using the word "report" instead of "refer" in the text of the IAEA resolution. Iran rejected the above resolution calling it "illegal, illogical and politically motivated." As a response to the September 2005 resolution, Iran decided to discontinue the voluntary implementation of Additional Protocol, thus scrapping the "containment and surveillance measures," limiting the intrusive powers of the inspectors and putting a halt to snap inspections as well. Iran also resumed small scale enrichment activities at its Natanz facility as of 16 February 2006, and by May, Gholamreza Aghazadeh, the head of Iran’s Atomic Energy Organization, claimed that Iran had managed to enrich uranium up to 4.8 percent purity. However, he maintained that Iran has no intention of enriching uranium beyond the five percent level, “as this level is sufficient for making fuel."[17]

In a diplomatic process parallel to EU efforts, Russia continued to pursue negotiations and offered to conduct the enrichment of Iran’s uranium on Russian territory, leaving only the uranium conversion to be carried out on Iranian soil. However, Iran insisted that uranium enrichment is a sovereign right guaranteed by the NPT, and would not accept Russia’s proposal to host its enrichment.[18] The rejection of the Russian proposal led the United Nations Security Council to convene a formal meeting on 15 March 2006, to discuss a draft resolution penned by France and the United Kingdom, which called on Iran to comply with IAEA demands by suspending uranium enrichment activities. The resolution also called on IAEA Director General Mohammed El-Baradei to report to the UN Security Council on Iranian compliance within 14 days and urges Iran to "ratify and implement in full" the Additional Protocol.[19] The Security Council failed to adopt the proposed resolution and instead, on 29 March 2006, released a Presidential Statement, which called on Iran to take the steps required by the IAEA Board of Governors. It also declared that suspension of enrichment and full verified compliance with the requirements set out by the IAEA would contribute to a diplomatic, negotiated solution that guarantees Iran’s nuclear program is exclusively for peaceful purposes.[20]

Further exacerbating the situation, Iran’s President Ahmadinejad gave a speech in April 2006 in which he discussed the existence of a second, secret uranium enrichment facility operating with P-2 centrifuges. Undisclosed work on P-2 centrifuges would constitute an additional violation of Iran’s safeguard obligations.[21] Following the speech, Iran refused to answer questions regarding the P-2 centrifuges.[22] However, in an effort to avoid Security Council sanctions, Iran volunteered to resume implementation of the Additional Protocol, allowing snap inspections, if its nuclear dossier were to be returned from the Security Council to the IAEA. At the same time, Mohammed Saeedi, the deputy head of Iran’s Atomic Energy Organization, made it clear that enrichment would continue in spite of renewed implementation of the additional protocol.[23]

In May 2006, the European Union decided to change its tactics in an effort to persuade Iran to halt enrichment without having to resort to UN Security Council sanctions. In a proposal, the EU offered to help Iran obtain advanced civilian nuclear technology in exchange for a cessation of enrichment activities. This proposal also received some support from the White House.[24] Iran’s President Ahmadinejad immediately rejected the offer.[25] Similarly, the United States made its own offer to Iran in what was an apparent about-face in U.S. foreign policy vis-à-vis Iran. The U.S. offer involved direct talks with the EU-3 and Iran if Tehran were to agree to suspend its enrichment and reprocessing activities and permit more intrusive international inspections.[26] In response, Iran said that it was willing to engage in direct talks regarding its nuclear activities but rejected the suspension of enrichment as a precondition for negotiations.[27]

Following Iran’s refusal, the United States joined forces with Britain, France, China, Russia and Germany in June 2006 to put together a package of substantive incentives in an effort to entice Iran to abandon its uranium enrichment. This package included four main incentives: 1) the provision of light water nuclear reactors and enriched fuel; 2) support for Iranian membership in the World Trade Organization; 3) the lifting of restrictions on the use of U.S. technology in agriculture, and 4) the availability of spare parts for civilian aircraft made by U.S. manufacturers.[28] Iran’s chief nuclear negotiator, Ali Larijani, responded by saying that there were "problems and ambiguities" in the incentive package, and Iran reiterated in July that it refused to accept any preconditions for nuclear talks with the West.[29]

Iran’s continued rejection of proposals by the West to entice it to cease its uranium enrichment activities and enter into negotiations caused the United States, the United Kingdom, France, Russia, China, and Germany to agree to refer Iran to the United Nations Security Council in July of 2006.[30]

On 31 July 2006, the United Nations Security Council (UNSC) issued Resolution 1696. This resolution was a response to the IAEA report on 27 February 2006 that outlined several outstanding issues and concerns relating to Iran’s nuclear activities. Resolution 1696 notes that based on the IAEA report, the UNSC believes that Iran’s nuclear program could have military dimensions, and demands that Iran comply with the IAEA and resolve the outstanding issues and concerns, as relating to its nuclear program. The resolution also demands that Iran immediately suspend all its enrichment activities, and calls on all states to prevent the transfer of items, goods, equipment, or technology that could contribute either to Iran’s enrichment or reprocessing activities or its ballistic missile program, and finally threatens to impose sanctions under Article 41 of the UN Charter, if Iran does not comply with the demands set forth by resolution 1696 by 31 August. [31]

In August 2006, Iran continued to deny access to IAEA inspectors seeking to visit the Natanz enrichment facility.[32] During the same month President Ahmadinejad inaugurated a heavy water production plant at Arak. Iran claimed the operation of the Arak Heavy Water Plant was in full compliance with international rules and regulations and for peaceful purposes only.[33] Later in August 2006, IAEA Director General Mohammed El-Baradei released another report on the implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran. The report stated that Iran had ignored the UN Security Council resolution requesting the suspension of all enrichment related activities. The report also stated that while Iran had not acted in accordance with the provisions of the Additional Protocol, it was providing the IAEA with the required reports and continued to comply with basic, mandatory inspections of nuclear material and facilities. The report also indicated that HEU particles had been found on storage containers located at the Karaj Waste Storage Facility.[34]

Despite contentions over Iran’s uranium enrichment activities, Russia continued the construction of Iran’s Bushehr reactor. Sergei Kiriyenko, the head of Russia’s Atomic Energy Agency said in September 2006 that the reactor was scheduled to come online in September 2007.[35] Russia also agreed to ship about 80 tons of fuel to the Bushehr Nuclear Power Plant project by March 2007.[36] The fuel supply agreement provides for the return of spent fuel to Russia. However, development plans stalled in March 2007 as Russia reportedly pulled out approximately 2,000 of the technicians and engineers used to support this project, as well as refusing to deliver the promised fuel to Bushehr power plant until Tehran complies with U.N. Security Council demands that it halt its uranium enrichment program.[37] After months of negotiations, the first batch of fuel was delivered on 17 December 2007. Over the course of five weeks a total of 120 metric tons of nuclear fuel were delivered to Iran, with the final shipment arriving in Bushehr on 28 January 2008. According to Atomstroyexport, Russia’s state-owned company responsible for the Bushehr project, the reactor was planned to become operational sometime in summer 2008, with an initial power generation of 500MW, half of its full capacity.[38] As of July 2008, however, the reactor has not been started, and reports indicate that Iran hopes the reactor will go online in October 2008.

In October 2006, U.S. President George Bush signed a law that imposes economic sanctions against nations and companies that aid Iran’s nuclear program. The Iran Freedom Support Act says that the United States should "not bring into force an agreement of cooperation with the government of any country that is assisting the nuclear program of Iran or transferring advanced conventional weapons or missiles."[39] In that same month Iran put forward its own proposal in an attempt to end the nuclear standoff and satisfy the demands of the IAEA, while maintaining its ability to conduct its own uranium enrichment. The proposal suggested that France establish a consortium for the production of enriched uranium in Iran, which would have enabled France to monitor and control Iran’s enrichment activities.[40] France immediately rejected the proposal and said that it would only negotiate with Iran through the U.N. Security Council.[41] Also in October 2006, Iran launched a second cascade of 164 centrifuges at its Pilot Fuel Enrichment Plant.[42]

On 27 December 2006, the UNSC adopted Resolution 1737. The UNSC noted with concern that Iran had not suspended enrichment as demanded by Resolution 1696, and had also not resumed cooperation with the IAEA under the Additional Protocol. Resolution 1737 again demands that Iran suspend all enrichment and reprocessing activities including R&D, as well as all heavy water related projects, and the construction of its research reactor. Also following 1696, UNSCR 1737 placed targeted sanctions on Iran, freezing the assets and other economic resources held by Iranian citizens or entities engaged in proliferation sensitive nuclear activities. Furthermore, Resolution 1737 stipulates that the IAEA has to stop all technical cooperation with Iran unless it directly relates to food, agriculture, medical, safety, or other humanitarian purposes. The resolution also calls on all states to not provide teaching or training to certain Iranian nationals involved in Iran’s nuclear program.[43]

As stipulated by UNSCR 1737, the IAEA continued to investigate Iran’s nuclear program, and issued another report on 9 February 2007. The report (GOV/2007/7) detailed the effects of Resolution 1737 on the IAEA’s technical cooperation with Iran. As a result of 1737, four national, 14 regional, and four interregional technical cooperation projects under the auspices of the IAEA were either stopped completely or were to be reviewed on a case-by-case basis. Examples of suspended projects include the establishing of a Nuclear Technology Centre in Iran, intended to provide a forum for Iranian scientists to exchange expertise with IAEA consultants.[44]

Two weeks later, on 22 February 2007, the IAEA issued report GOV/2007/8 on Iran’s nuclear activities. The report stated that, in defiance of SC Resolution 1737, Iran had continued to operate PFEP and intermittently fed 66 kgs of UF6 into single machine as well as 10-machine, 24-machine, and 164-machine cascades. During inspections Iran claimed it had reached an enrichment level of 4.2% U-235. Iran also informed IAEA officials that it would continue installing and gradually bringing into operation 18 cascades at the 3000-machine hall at the FEP. The IAEA noted that Iranian representatives had refused to allow installation of remote monitoring equipment as stipulated by the Additional Protocol. Also, the report noted that approximately 8.7 tons of natural UF6 were transported from the Esfahan UCF to the FEP. The report mentions hot cell activity, but apparently there were no reprocessing efforts. Iran failed to reply to IAEA requests concerning further environmental sampling, and did not provide any further information about the origin of its original centrifuge (P-1, P-2) technology. Summarizing, the IAEA report concludes that since Iran has not implemented the Additional Protocol, the requested transparency measures, or suspended enrichment activities, it is unable to verify the peaceful nature of Iran’s nuclear program. [45]

In response to Iran’s continued intransigence, the UNSC adopted Resolution 1747 on 24 March 2007, which places travel restrictions on Iranian nationals involved or directly associated with Iran’s nuclear or ballistic missile programs along with an arms embargo on the Islamic Republic of Iran. UNSC resolution 1747 prohibits the sale, supply, or transfer of battle tanks, armored carrier vehicles, large caliber artillery systems, combat aircraft, attack helicopters, warships, missiles, and missile systems to Tehran. The resolution also restricts financial assistance such as loans or grants to Iran. [46]

In May 2007, the IAEA issued another report (GOV/2007/22) dealing with Iran’s nuclear program. The IAEA noted that Iran continued to test centrifuge machine cascades of various configurations at its PFEP. Since the last report, Iran had fed over 260kgs of UF6 into the cascades at Natanz, claiming an enrichment level of 4.8% had been reached. In May, Iran managed for the first time to operate eight 164-machine cascades simultaneously. The IAEA inspectors were not granted access to the IR-40 research reactor at Arak, but satellite imagery revealed that the construction was going forward, as was the operation of the Heavy Water Production Plant (HWPP). Iran still did not respond to additional information requests about the acquisition of its centrifuge technology, and the casting of uranium metal into hemispheres, and also failed to implement the demanded transparency measures. Finally, the IAEA pointed out that the alleged studies that Iran had undertaken regarding UO2 conversion into UF4, high explosives testing, and re-entry vehicle design remained unresolved and were a matter of serious concern. Finally, the IAEA noted with regret that its knowledge about the Iranian nuclear program had actually deteriorated since its last report, and that Iran continued its enrichment and heavy water related projects.[47]

In August 2007, the IAEA released another report on Iran: GOV/2007/48. According to this document, since February, Iran had fed approximately 690kgs of UF6 into the cascades at Natanz. Iranian officials again claimed an enrichment level of 4.8%, but IAEA samples indicated an enrichment level closer to 3.7%. On a positive note, GOV/2007/48 indicated that certain safeguards had been implemented since the last report. IAEA inspectors were also able to conduct design information verification on the IR-40 reactor. During a technical meeting in Tehran, Iranian officials also provided detailed information on the TRR reactor core and the plutonium separation experiments that had been conducted at the site, and IAEA officials noted that the findings were consistent with information previously available to the UN’s nuclear watchdog. The issue of the presence of HEU particles at the Karaj Waste Storage Facility was also resolved, and the IAEA accepted Iran’s explanation that the HEU trace amounts had been caused by TRR fuel assemblies that had been stored temporarily in the containers at Karaj. However, Iran was not able to clear up the remaining issue of the details of centrifuge technology acquisition. Regarding the alleged uranium conversion, high explosives, and re-entry vehicle studies, Iran promised to inform the IAEA in a timely manner. However, according to the report, Iran continued with enrichment, operation of the PFEP, construction and operation of the FEP, IR-40 reactor and HWPP, all in defiance of the UNSC resolutions.[48]

The next IAEA report, GOV/2007/58, released on 30 November 2007 was also mixed in its evaluation of Iran’s nuclear efforts. According to the document, Iran did finally provide information on the origin of its centrifuge technology, and the IAEA concluded that Iran’s statements were consistent with known information about the black market supplier network for nuclear technology. Iran also claimed it had received the document on uranium casting into hemispheres with the first shipment of P-1 centrifuges back in 1987. In 1996, Iran was offered the P-2 centrifuge including a full set of blueprints, but only began working on the P-2 in 2002. Again these facts were seen as consistent with information gained through interviews conducted with members of the nuclear black market network. However, the issue of UF4 conversion (“The Green Salt Project”), high explosives testing, and re-entry vehicle design studies remained unresolved. Regarding enrichment, Iran had continuously operated and fed UF6 into 18 164-machine cascades at its FEP, which brought the amount of UF6 processed at Natanz since February 2007 to 1240kgs. Again, the IAEA estimated an enrichment level of 4.0% based on samples taken from cascade components, while Iran claimed it had reached 4.8%. Summarizing, the document noted that Iran had continued its enrichment and heavy water related projects in defiance of the UNSC resolutions, but did provide timely access to key figures of its nuclear program. [49]

In December 2007, IAEA Director General Mohammed El-Baradei met with Ayatollah Khamenei, President Ahmadinejad, Iran’s Vice President, and the President of the Atomic Energy Organization of Iran (AEOI) Aghazadeh, and Foreign Minister Mottaki in Tehran. The Iranian officials assured the IAEA representatives of the peaceful nature of the Iranian nuclear program. However, the IAEA issued a report on 22 February 2008, GOV/2008/4, in which it noted that the former head of the Physics Research Center (PHRC), now a professor at a technical university had procured or attempted to procure balancing machines, mass spectrometers, magnets, and fluorine handling equipment, items that all could be useful for uranium enrichment. Iran did provide information about the individual and attempts to procure the proliferation sensitive material throughout January 2008, and at the end of the month the issue was resolved. Also, Iran did finally react to the allegations about studies undertaken in uranium conversion, high explosives testing, and re-entry vehicle design. The IAEA showed Iran the following evidence received from other member states: a flow-sheet of bench conversion of uranium dioxide into uranium tetraflouride, technical information on the alleged Iranian testing of high voltage detonator firing equipment, including the simultaneous firing of multiple exploding bridge-wire detonators (EBW) in a testing arrangement involving a 400m shaft and a remote firing capability (which the IAEA believes is highly relevant for nuclear weapons R&D) and finally, parameters and development work on a re-entry vehicle designed for the Shahab 3 MRBM (according to the IAEA the schematic layout of the re-entry vehicle’s inner core could accommodate a nuclear warhead). Iran rejected all three allegations, and claimed that the evidence had been fabricated. Meanwhile Iran continued with its enrichment activities at the original 18 cascade area, and the report noted that installations for other cascade areas were ongoing. The IAEA document also noted that Iran had informed the IAEA in January 2008 that it planned to soon install a new generation sub-critical IR-2 centrifuge at its PFEP. The report stresses that enrichment continued and that the alleged issues of the Green Salt Project, the high explosives testing, and the re-entry vehicle studies remain matters of serious concern.[50]

Following the IAEA’s February 2008 report, the UNSC issued adopted Resolution 1803. In UNSCR 1803, the UN called on Iran to take the steps required by the IAEA, and added more travel restrictions on Iranian nationals involved in either the nuclear or ballistic missile programs. The resolution also called on all states to not grant Iran financial support in the form of export credits, guarantees, or insurances. Two of Iran’s largest financial institutions, Bank Melli and Bank Saderat, are also the target of economic sanctions. Finally, the resolution demanded that all states inspect the loads of Iran Air Cargo and Islamic Republic of Iran Shipping Line, if there are reasonable grounds to believe they are transporting goods prohibited under resolutions 1737 and 1747.[51]

GOV/2008/15 released on 26 May 2008 reported that Iran continued operation of its original 3,000-machine IR-1 unit at FEP, and notes that between December 2007 and May 2008, Iran introduced 2,300kgs of UF6 feed into its operating cascades, which brings the total amount since February 2007 to 3,970 kgs. Since January, Iranian scientists had been feeding 19kgs of UF6 into the 20-machine IR-1 cascade, the single IR-2 centrifuges, the 10-machine IR-2 cascade, and the recently introduced new generation sub-critical single IR-3 centrifuges (all under IAEA containment and surveillance). Again there was a discrepancy between enrichment levels declared by Iran and the IAEA. Samples taken by IAEA inspectors indicate a 4.0% enrichment level, while Iran claims it reached a level of 4.7%. In May, an inspection at Iran’s Fuel Manufacturing Plant revealed that the pellet production process for the heavy water reactor is close to operational level, and Iran had produced some test pellets, but the IAEA is confident that before Iran can produce fuel rods and assemblies it would require more equipment. The IAEA report also reported on Iran’s reaction to the allegations regarding the Green Salt Project. According to Iranian officials, it would not have made sense for Iran to develop alternative uranium conversion methods, as it had already finalized its UCF. Regarding the allegations of high explosives testing, Iran acknowledged that it had simultaneously tested several EBW detonators, but stressed that the tests were intended to benefit civil and conventional military applications. Finally, Iran also rejected the accusations surrounding the re-entry vehicle design, saying that the evidence had been submitted in electronic form, and thus could have been easily manipulated, while also pointing out the reports were incomplete and inconsistent, casting doubt on their veracity. The IAEA report remains critical of Iran’s responses to the allegations, believing that Tehran is not sharing all relevant information with the UN’s nuclear watchdog.[52]

On 14 June 2008, Javier Solana, the European Union’s High Representative for the Common Foreign and Security Policy delivered a new P5+1 proposal designed to convince Iran of suspending its uranium enrichment activities. Solana headed a six-member delegation of senior diplomats from China, France, Germany, Russia, and the United Kingdom, that met in Tehran with Iranian Foreign Minister Manouchehr Mottaki, and Iran’s top nuclear negotiator Saeed Jalili. The proposal differs little from the original package proposed to Iran in 2006, which among other economic incentives offered assistance in LWR construction and a guaranteed nuclear fuel supply. However, officials from the P5+1 nations hope that more specific proposals combined with an increased international support for punitive measures against Iran will entice the Iranians to seriously consider the new proposal.[53] The letter accompanying the proposal states that formal negotiations could begin as soon as Iran suspends its enrichment and reprocessing activities.[54]

Iran reacted to the renewed proposal by stating that it was willing to discuss a “timetable” for future negotiations about its nuclear program. President Ahmadinejad told Iranian state television on 14 July that his top nuclear negotiator Saeed Jalili will meet EU foreign policy representative Javier Solana and envoys from the P5 states in Geneva on Saturday, 19 July.[55] In a surprising development, the United States announced it would send its representative, Undersecretary of State William J. Burns, to participate in the Geneva talks. Up until now, the U.S. stance has been not to engage in direct talks with Tehran, as long as Iran continues its enrichment activities.[56] The apparent U.S. change towards Iran comes closely on the heels of media reports about possible plans to establish a U.S. interest section in Tehran, which would mark the end of 30 years of severed diplomatic relations between Iran and the United States. This development has been welcomed by President Ahmadinejad who stated that, “We will receive favorably any action which will help to reinforce relations between the peoples.”[57]

Key Sources:
[1] Quoted in Poneman, Daniel, Nuclear Power in the Developing World (London: George Allen & Unwin, 1982), p. 86.
[2] Akbar Etemad, "Iran," in A European Non-Proliferation Policy, edited by Harald Muller, (Oxford: Clarendon Press, 1987), p. 212.
[3] As of October 2003, according to Russian Ministry of Atomic Energy officials, the Bushehr reactor is set to go online in 2005, postponed a year from 2004 because of the need to replace certain equipment.
[4] Michael Jasinski, Russia’s Nuclear and Missile Technology Assistance to Iran, CNS Research Story, 23 June 2003.
[5] Statement by Reza Aghazadeh to the 46th General Conference of the IAEA, 16 September 2002, http://www.iaea.org/About/Policy/GC/GC46/iran.pdf
[6] "Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran," Report by the Director-General, International Atomic Energy Agency, GOV/2003/40, 19 June 2003, http://www.iaea.org/worldatom/Documents/Board/2003/gov2003-40.pdf.
[7] Additional Protocol is a voluntary agreement signed by each country with the IAEA, which allows for more intrusive inspections to be conducted by the IAEA inspectors. The inspectors may request and the state must grant access to any place on a nuclear site or to any other facility, declared or not, where the IAEA suspects a nuclear activity.
[8] Global Security Newswire, "Iran Signs Additional Protocol," 18 December 2003, http://www.nti.org/d_newswire/issues/2003_12_18.html#C836A786.
[9] “Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran,” Report by the IAEA Director General, 27 February, 2006, GOV/2006/15
[10] "Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Resolution adopted by the Board on 18 June 2004," IAEA, 18 June 2004, http://www.iaea.org/Publications/Documents/Board/2004/gov2004-49.pdf/.
[11] "Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran, Report by the Director General," IAEA, 1 June 2004, http://www.iaea.org/Publications/Documents/Board/2004/gov2004-34.pdf/.
[12] Ibid.
[13] Louis Charbonneau, "El Baradei wary of taking Iran to Security Council," Reuters, 8 July 2004, http://www.iranexpert.com/.
[14] Ibid.
[15] Ibid.
[16] "Sanctions against Iran 'unacceptable', Russian minister," AFP, 17 November 2003, http://www.iranexpert.com/; Arnaud de Borchgrave, "Iran in bombsights?" Washington Times, 5 July 2004.
[17]"Iran achieves higher uranium enrichment level," Agence France Presse, 2 May 2006; "Iran says it has enriched uranium to 4.8 percent," RIA-Novosti, 2 May 2006.
[18]"Report: Russia and Iran resume nuclear negotiations," Associated Press, 2 March 2006; "Iran will allow IAEA to inspect nuclear programs-negotiator," RIA-Novosti, 2 March 2006.
[19]"Full U.N. Security Council to Discuss Iran on Friday," Global Security Newswire, 15 March 2006; Warren Hoge, "Text on Iran’s Nuclear Work is under study by the U.N. Council," New York Times, 5 March 2006.
[20]"Statement by the President of the Security Council, S/PRST/2006/15," United Nations, 29 March 2006.
[21]"IAEA inspector to press Iran’s centrifuge claims," Global Security Newswire, 18 April 2006.
[22]David E. Sanger and Nazila Fathi, "Iran is described as defiant on 2nd Nuclear Program," New York Times, 25 April 2006.
[23]"Iran says to allow inspections if U.N. drops case," New York Times, 29 April 2006.
[24]Jonathan S. Landay and Matthew Schofield, "EU offers civilian nuclear technology to Iran," Knight Ridder Newspapers, 15 May 2006.
[25]Nazila Fathi, "Iran rejects potential European incentives," New York Times, 10 May 2006; "Iran shuns EU ‘reactor incentive’," BBC, 17 May 2006.
[26]Steven R. Weisman and John O’Neil, "Rice proposes path to talks with Iran on Nuclear Issue," New York Times, 31 May 2006; "US willing to join Iran talks," Global Security Newswire, 31 May 2006.
[27]"Iran cautious over U.S. talks offer," BBC, 1 June 2006; "Iran wants talks with U.S. but refuses nuclear freeze," Global Security Newswire, 1 June 2006.
[28]"‘Carrot-stick’ deal agreed on Iran," CNN, 2 June 2006; "EU’s Solana to present Iran with nuclear proposal," CNN, 5 June 2006; "Iran ‘positive’ on nuclear offer," BBC, 6 June 2006.
[29]"Iran rejects talk preconditions," BBC, 24 July 2006.
[30]"Iran referred to Security Council," BBC, 12 July 2006.
[31] United Nations Security Council Resolution 1696, adopted 31 July 2006.
[32]George Jahn, "Iran Denies Inspectors Access to Site," Associated Press, 21 August 2006.
[33]"Iran nuclear project forges ahead," BBC, 26 August 2006.
[34]"Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran," International Atomic Energy Agency, 31 August 2006.
[35]"Iran’s Russia-built atomic plant to start up Sept ’07," Reuters, 8 September 2006.
[36]"Russia to deliver 80 tons of fuel to Iran NPP-Atmostroiexport," RIA-Novosti, 26 September 2006.
[37]"European and U.S. officials: Russia is pulling out its experts from Bushehr nuclear reactor," International Herald Tribune, 21 March 2007.
[38] “Russia completes shipment of nuclear fuel,” Chinadaily, 29 January 2008.
[39]"Bush Signs Iran Sanctions Law," Global Security Newswire, 2 October 2006.
[40]"Iran pushes France nuclear deal," BBC, 3 October 2006.
[41]"France Rejects Iran Nuclear Partnership Proposal," Deutsche Presse-Agentur, 3 September 2006; "Iran pushes France nuclear deal," BBC, 3 October 2006.
[42]Mark Heinrich, "Exclusive-Iran expands nuclear centrifuge programme-diplomats," Reuters, 23 October 2006.
[43] United Nations Security Council Resolution 1737, adopted 27 December 2006.
[44] “Cooperation between the Islamic Republic of Iran and the Agency in the light of United Nations Security Council Resolution 1737 (2006)”, Report by the Director General, International Atomic Energy Agency, GOV/2007/7, 9 February 2007.
[45] “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolution 1737 (2006) in the Islamic Republic of Iran,” Report by the Director General, International Atomic Energy Agency, GOV/2007/8, 22 February 2007.
[46] United Nations Security Council Resolution 1747, adopted 24 March 2007.
[47] “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions in the Islamic Republic of Iran,” Report by the Director General, International Atomic Energy Agency, GOV/2007/22, 23 May 2007.
[48] “Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran,” Report by the Director General, International Atomic Energy Agency, GOV/2007/48, 30 August 2007.
[49] “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006) and 1747 (2007) in the Islamic Republic of Iran,” Report by the Director General, International Atomic Energy Agency, GOV/2007/58, 15 November 2007.
[50] “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006) and 1747 (2007) in the Islamic Republic of Iran,” Report by the Director General, International Atomic Energy Agency, GOV/2008/4, 22 February 2008.
[51] United Nations Security Council Resolution 1803, adopted 3 March 2008.
[52] “Implementation of the NPT Safeguards Agreement and Relevant Provisions of Security Council Resolutions 1737 (2006), 1747 (2007), and 1803 in the Islamic Republic of Iran,” Report by the Director General, International Atomic Energy Agency, GOV/2008/15, 26 May 2008.
[53] Catherine Philp, “Tehran gets last chance of deal on nuclear power,” The Times, 14 June, 2008.
[54] The original text of the diplomatic offer is accessible at http://www.isis-online.org/publications/iran/Diplomatic_Offer_16June2008.pdf.
[55] “Iran, EU to discuss nuclear 'timetable': Ahmadinejad,” AFP, 14 July 2008.
[56] Elaine Scolio and Steven Lee Myers, “Policy shift seen in U.S. decision on Iran talks,” The NY Times, 17 July 2008.
[57] Ewan MacAskill, “US plans to station diplomats in Iran for the first time since 1979,” The Guardian, 17 July 2008
Nuclear monitor," CBS, 22 February 2007.

	Updated August 2008