Western powers exploit rifts in Iran with nuclear ultimatum

The EU foreign policy chief is leading a senior delegation of world powers to warn Iran that it must either co-operate in developing a peaceful nuclear programme on Western terms or face the threat of international isolation and further economic sanctions.

The envoy, Javier Solana, will today present a revised package of US-backed incentives to the Iranian Foreign Minister and the country's chief nuclear negotiator, in the hope of persuading Iran to end sensitive nuclear activities in return for Western assistance in developing a nuclear energy programme.

Mr Solana described the package as "generous and comprehensive", although he said that no "miracles" were expected at the talks in Tehran. A senior British official said that members of the delegation were "not optimistic" of a breakthrough, as Iran has continued to rebuff the central UN demand for a suspension of its uranium enrichment programme. The official said the latest package insists that Iran suspends nuclear enrichment before formal negotiations can begin.

Despite three rounds of international sanctions including travel bans and asset freezes, the Iranians have continued to pursue their nuclear programme, which Western governments believe could lead to production of a bomb.

The latest "carrot" of diplomatic and economic measures is being delivered after several days of bellicose statements from Israeli officials. The US President, George Bush, has spoken out forcefully about how "Iran with a nuclear weapon would be incredibly dangerous for world peace."

Mr Solana is accompanied by senior officials from Britain, Germany, Russia, China and France. The US, the sixth big power involved in the process, is not sending a delegate – the US and Iran do not have diplomatic relations. But a letter to be handed to the Iranian Foreign Minister, Manouchehr Mottaki, presents the choice to Iran in stark terms and has been signed by all six foreign ministers.

The package, which is also endorsed by the US, is a reworked version of European proposals put forward in 2006 and rejected by Iran. It includes the promise of guaranteed fuel supplies for a civilian nuclear programme, although Britain and the US remain opposed to Tehran's key demand for a domestic fuel cycle.

The West hopes that publication of the initiative will feed into a debate on tactics within the Iranian leadership at a time when the rift between so-called "pragmatic" conservatives and hardliners has been brought into sharp focus by parliamentary elections. The Iranians now recognise that the West is serious about pursuing sanctions, the British official said. "They are in an economic mess ... they're feeling the pinch."