Nuclear stunt shows Iran's uncompromising mood

Warning of end to EU oil supplies fuels tensions further and adds to risk of Israeli military strike

A boastful Iran declared yesterday that it had made important new advances in its nuclear sector, compounding its confrontation with the US and its allies, including Israel, and further risking a military response.

Tehran also summoned the ambassadors of six European countries and warned it was ready to cut off oil shipments to them as a riposte to a new EU embargo on Iranian oil that is not due to take effect for another five months. The embargo was at the heart of a new round of sanctions agreed by EU nations last month as part of a co-ordinated effort with Washington to force Iran to forswear its nuclear ambitions.

"Iran warns Europe it will find other customers for its oil," the official Iranian news agency, Irna, said. "European people should know that if Iran changes destinations of the oil it gives to them, the responsibility will rest with the European governments themselves."

Those countries facing an early interruption of shipments from Iran when they may not yet have found alternative supplies are France, Italy, Spain, the Netherlands, Greece and Portugal.

The White House last night said that Iran was "lashing out" in an attempt to distract its own population from the increasing impact of international sanctions. As Barack Obama was reportedly considering expelling Iran from the Society for Worldwide Interbank Financial Telecommunication (Swift), a financial clearing house that is vital to Iran's ability to sell its oil, his chief spokesman, Jay Carney, said "defiant acts" of Iran's leaders are a sign they are feeling the pressure of such measures.

That defiance was also on display with the trumpeting by Iran of its new technological advances. President Mahmoud Ahmadinejad himself oversaw the insertion for the first time of domestically made nuclear fuel rods into a research reactor at a plant in northern Tehran. A semi-official agency, Fars, said that "a new generation of Iranian centrifuges" had been installed at the country's main uranium-enrichment facility in Natanz.

"Our nuclear path will continue," Mr Ahmadinejad said in a live television broadcast to the nation. "The era of bullying nations has past. The arrogant powers cannot monopolise nuclear technology. They tried to prevent us by issuing sanctions and resolutions, but failed." Not unusually the messages from Iran were mixed with news also emerging that its nuclear negotiator, Saeed Jalili, has indicated an interest in returning to the negotiating table. In a letter to the EU's foreign policy chief, Catherine Ashton, he said Iran would like to "hold new talks over its nuclear programme in a constructive way".

The last attempt at talks between Iran and the five members of the UN Security Council plus Germany unravelled slightly more than a year ago when neither side could agree on an agenda. While Washington and others would welcome new talks in principle, they will be wary of Iran using them as a delaying tactic while accelerating its programme.

The patience of Israel, known to be pondering possible military action, is running especially thin. The US has also refused to take the option of military strikes off the table, although the clear preference in Washington is to resolve the stand-off diplomatically.

Mr Obama's national security team is especially concerned about being dragged into a new conflict started not by the US but by Israel launching strikes on Iran's nuclear sites.

Benjamin Netanyahu, the Israeli Prime Minster, stepped up his own rhetoric in a statement to parliament about deadly bomb attacks targeting Israeli diplomats this week in Georgia, India and Thailand that were orchestrated, according to Israel, by Tehran. Iranian officials deny any involvement.

"These days, Iran's acts of terror are clear to everyone," Mr Netanyahu said. "Iran is disrupting world stability and hurting innocent diplomats... countries around the world must condemn Iran's terror operations and draw red lines against Iranian aggression."

America's option of throwing Iran out of Swift could push oil prices higher, hurting the world economy. But it is seen as one way of placating Israel.