Clinton scraps Iranian oil deal

President Bill Clinton yesterday blocked a controversial deal for a United States company to develop two offshore Iranian oilfields, issuing an executive order barring aid for the oil industry of a country that Washington accuses of fostering terrorism and seeking to develop nuclear arms.

The agreement, worth up to $1bn (£0.6bn) and involving Dutch subsidiaries of the Conoco company, would have been the first big contract of its kind since the Tehran hostage crisis of 1979. But opposition has mounted steadily since word first emerged last week, first from the State Department, and then from important board members at Du Pont, Conoco's parent company.

President Clinton's decision to intervene, made public in a White House statement yesterday, appears to have been taken under the International Emergency Economic Powers Act, which gives the President sweeping powers to curb the activities of US companies on grounds of national security.

His order is intended to send a "clear and unequivocal message" to Iran that normal relations with the US are impossible until Tehran changes its "unacceptable behaviour".

That behaviour, the statement makes clear, encompasses support for terrorism, at- tempts to undermine the Middle East peace process and the pursuit of weapons of mass destruction.

It warned, furthermore, that Washington was examining other economic measures that may be taken against Iran, either alone or in conjunction with its allies. A crucial role seems to have been played by Jewish organisations in the United States, which vigorously oppose any restoration of normal ties with Tehran.

With a 25 per cent stake in Du Pont, the Seagram's company has three seats of the 16 on the Du Pont board, occupied by three members of the Bronfman family, Seagram's chief executive officers.

Edgar Bronfman, Charles Bronfman and Edgar Bronf- man Jr are prominent in the World Jewish Congress and other Jewish groups.