TEHRAN - The Iran Atomic Energy Organisation said on Monday that it will continue to enrich uranium up to the five percent level and could even raise it to a higher 20 percent grade if talks on a third-party enrichment deal fail.
"The Islamic Republic of Iran... will continue its enrichment activities inside Iran up to the five percent level," the official IRNA news agency quoted the organisation's spokesman Ali Shirzadian as saying.
"But if the negotiations do not yield the desired results, Iran will start enriching uranium to 20 percent level for its Tehran reactor. It will never give up this right."
Iran will enter Vienna talks with the major powers on Monday seeking a guaranteed supply of 20 percent enriched uranium and insisting it will make up any shortfall by domestic production, officials say.
Iranian analysts say Tehran will also attempt to allay concerns over its nuclear programme.
Officials from Iran, the International Atomic Energy Agency, France, Russia and the United States will meet in Vienna to discuss how to provide the 20 percent enriched uranium needed for a research reactor in the capital Tehran.
Iranian media say the talks could run on into Tuesday.
The meeting is the fruit of October 1 talks in Geneva, at which Iran agreed to ship 3.5 percent low-enriched uranium abroad for further purification and subsequent return to Iran.
Enriched uranium is the most controversial aspect of Iran's atomic programme, as it can be used as fuel for a nuclear reactor or, in much purer form, as the fissile core of an atomic bomb.
"At the Vienna meeting, Iran will seek a guaranteed supply of 20 percent enriched uranium according to a tight timetable," said Mohammad Reza Mohammad Karimi, associate editor of the English-language Iran Daily newspaper.
"Iran will go for concrete agreements. If there are no unforeseen hurdles, then the meeting is expected to yield good results."
Iranian officials have said Tehran is entering the Vienna talks in a strong position as it could manufacture nuclear fuel on its own if it wanted to.
They have warned that if the talks fail, Iran will not hesitate to enrich the uranium itself to the 20 percent purity level required for the Tehran reactor which produces isotopes for medical use.
Abolfazl Zohrehvand, aide to lead nuclear negotiator Saeed Jalili, said Iran has the ability to enrich uranium up to 20 percent and may want to achieve 63 percent enrichment, the official IRNA news agency reported.
"The current proposal is for enrichment to be done on our territory while only enrichment above five percent, in particular for the research reactor in Tehran, will be done in another country," the news agency quoted him as saying.
"The importance of this is that Iran will retain the techniques and technology of enrichment... and we will keep our sites and research centre.
"It is possible that in certain circumstances we will need uranium enriched to 63 percent, which we will buy under the supervision of the IAEA or indeed we will do the enriching ourselves," IRNA quoted Zohrevand as saying.
Last week, Ali Shirzadian, spokesman for the Iran Atomic Energy Organisation, said the IAEA will be responsible if any such deal fails, and that then "Iran will act directly to supply the fuel for the Tehran reactor."
He said Tehran "fully owns the enrichment technology and therefore it will sit at the negotiating table with leverage."
He said the Tehran reactor needs 200 kilogrammes (440 pounds) of fuel and the government would prefer to buy it in bulk.
An Iranian nuclear official, who declined to be named, said Tehran will discuss the modalities of procuring this fuel on Monday.
"It is not difficult to reach an agreement. Our priority is to have this fuel which is for humanitarian purpose," he said, indicating that the Tehran reactor is an internationally supervised research facility.
French foreign ministry spokeswoman Christine Fages said last week that Paris hopes the Vienna meeting will facilitate shipping out 1,200 kilos of Iran's low-enriched uranium by the end of 2009 which could "reduce short-term risk that Iran could divert the uranium to a nuclear weapon."
The Iranian official said several options will be discussed.
According to a recent IAEA estimate, Iran has around 1,500 kilos of low-enriched uranium.
The Vienna meeting will be followed by a second round of negotiations between Iran and six world powers in line with the Geneva talks.
The date and venue for that meeting has yet to be fixed.
China could bend on Iran nuclear sanctions
China has repeatedly said it opposes sanctions against Iran over its nuclear programme, but Beijing could make concessions to protect its wider interests, especially in terms of Sino-US ties, experts say.
Of the six major world powers working to defuse the standoff with Tehran, Beijing and Moscow have so far formed a united front, rejecting sanctions and pushing for further negotiations despite intensifying pressure from Washington.
Their commercial interests could be a factor in their decision-making, experts say -- China and Russia are the two countries with the biggest stakes in Iran's natural gas sector.
Iran also is the number three source of crude oil for energy-hungry China, and trade between the two countries has exploded in recent years, amounting to 28 billion dollars in 2008, according to official figures.
While US Secretary of State Hillary Clinton unsuccessfully tried to persuade Russia to support new sanctions against the Islamic republic during a visit to Moscow last week, one of her deputies was here trying to win Beijing's support.
"If we are to make real progress on sending a consolidated message to Iran, we are going to need the support of China," US Assistant Secretary of State Kurt Campbell told reporters.
Xu Tiebing, a professor of international relations at Communication University of China, said Beijing would not support new sanctions "as long as there is not sufficient evidence showing that Iran is using its technology to develop weapons."
But, despite its protestations, China has supported three previous UN Security Council resolutions on Iran's contested atomic programme.
And experts say it could further soften its position, even though nearly 14 percent of China's oil imports come from Iran and several Chinese firms are in line to secure lucrative gas contracts there, notably in the South Pars field.
Iran's vice oil minister Hossein Noqrehkar-Shirazi has said Chinese firms are ready to invest 48-50 billion dollars in oil and gas ventures, but Beijing has not signed any major contracts yet.
"The Chinese do not understand what the Iranians want to do," said Michal Meidan, a researcher at the Paris-based Asia Centre.
"They are not going to pour money into the country before seeing what happens with the sanctions," she said, adding that Beijing would be hard-pressed to vote against UN sanctions and calling a veto "unthinkable."
China's burgeoning ties with Iran, compared with its political and economic links to Washington, still carry very little weight, Meidan said.
A vote by Beijing in Tehran's favour within the UN "would run counter to many of its interests with the United States and Europe, and Iran in the end is not really one of its major partners," she said.
"In the worst case scenario, the Chinese would abstain... but I think what they will try to do is modify the text of an eventual resolution and make the most of the negotiations before any discussions (on a resolution)."
"Of course, this will all depend on what the Russians do," Meidan added.
Samuel Ciszuk, an analyst at IHS Global Insight, agreed that China was unlikely to use its veto but would instead try to "water down" any UN text targeting Tehran.
"Looking over the last few years, China has not stuck up for Iran," Ciszuk said.
"China needs energy but they also need the market for their products in the West," he added. "There is a lot of interest in keeping relations with the developed economies on a good footing."
He said Chinese firms such as state-owned energy giants CNPC, CNOOC and Sinopec were the "only players in the starting blocks" in Iran and had been "clever in moving in where Western companies previously had a stake."
"It is not just South Pars -- it is South Azadegan, it is North Pars," Ciszuk said, while noting the companies "haven't really started investing money... they are almost as careful as Western companies."
As for the possibility raised in Washington of sanctions on fuel deliveries to Iran, experts say the impact of such a move would be minimal for China, as the transactions were mainly spot contracts.
Meidan said the 30,000-40,000 barrels a day at stake, according to a Financial Times report, "would only mildly affect Chinese traders."
Iran insists it has the right to develop nuclear technology, which it says is aimed at generating energy for its growing population.
Although Iran has oil, it is still dependent on petrol imports to meet about 40 percent of domestic consumption.
Israel is the only country in the Middle Ease that actually has nuclear weapons.
Observers say due the strong Jewish and pro-Israel lobbies in the US and some European countries, these countries have taken a hypocritical stance in relation to nuclear issues in the region.
Tehran had repeatedly protested against Israeli and US war threats, warning them that it would retaliate in the event of any strike against Iran.