Iran threatened America with "harm and pain" if sanctions were imposed as Tehran was finally referred to the UN Security Council for action over its suspected nuclear weapons programme.
A senior Iranian official warned: "The United States may have the power to cause harm and pain but it is also susceptible to harm and pain. So if the United States wishes to choose that path, let the ball roll."
The official, Javad Vaeedi, was speaking on the sidelines of a board meeting of the International Atomic Energy Agency in Vienna, which wound up yesterday by seeking formal action by the Security Council, after months of delay because of resistance from Russia and China. Asked whether the Islamic Republic would use an "oil weapon", Mr Vaeedi said: "We will not [do so now], but if the situation changes, we will have to review our oil policies."
The warning drew a strong response from the White House spokesman Scott McClellan, who said: "Provocative statements and actions only further isolate Iran from the rest of the world." Amid the escalating war of words, in which Undersecretary of State Nicholas Burns said in Washington that Iran "directly threatens vital American interests", the IAEA director general, Mohamed ElBaradei urged both the West and Iran to adopt a "cool-headed approach, to lower the rhetoric".
The US representative in Vienna, Gregory Schulte, called for the Security Council to "emphasise that Iran will face consequences" if it fails to comply with international demands laid down by the IAEA and which will be considered by the council next week.
The European Union's statement made it clear that Tehran had failed to satisfy the agency. "Indicators of a possible military dimension to Iran's programme continue to be a legitimate source of intense concern," said Thomas Stelzer, the Austrian delegate, on behalf of the EU.
Although the Security Council is empowered to order sanctions, European and US diplomats hope that, as a first step, a consensus can be reached in the 15-member council for a formal demand that Tehran returns to a freeze on sensitive nuclear-related activities and co-operates fully with the IAEA.
British diplomats said that the UN demands would include a deadline for compliance, but China and Russia - which both hold veto power on the Security Council - are likely to balk at such a suggestion.
Yesterday's decision by the IAEA further intensifies the pressure on Iran which provoked a crisis in January by reopening facilities capable of enriching uranium to weapons-grade strength. Russian compromise proposals were not accepted by Iran in time for the three-day IAEA meeting despite intensive negotiations. A senior analyst warned that the outcome of next week's council discussions were unpredictable, notably because of open opposition from Russia and China to sanctions.
Both countries have strong economic ties to Iran, which insists that its nuclear intentions are purely peaceful and maintains that it has a treaty right to enrich uranium on its own soil. "The Russians have agreed to go to the council, but up to what point is still not clear," said a European diplomat.
There is also some concern about the mixed messages emanating from the Bush administration - including warnings from Vice-President Dick Cheney and the UN ambassador, John Bolton, of possible military action - which could prove counter-productive. "The Americans are giving the impression they favour regime change. That is not an incentive for the Iranians to comply," the senior analyst said.
The EU left open the door to a diplomatic solution, and Mr ElBaradei said future negotiations with Europe should also include the US on the issue of security guarantees for Iran.
Diplomats said Iran felt confident it could ride out the storm despite facing international isolation because Iranian public opinion stands firmly behind the hardline President, Mahmoud Ahmadinejad, on the nuclear issue. The country's economic influence has meanwhile been enhanced by the strong oil prices.Reuse content