The mood is grim behind the scenes at the headquarters of the UN nuclear watchdog agency, with diplomats expressing dismay at Iran's response to a Western proposal to defuse the standoff over its nuclear program. Publicly at least, world powers insist the deal is not dead, saying that Tehran may still swing around and accept an offer meant to hamper any ability to make a nuclear warhead while providing it with fuel for its research reactor. The International Atomic Energy Agency is describing Iran's reply Thursday to the plan as an “initial response.” The US State Department says it is still awaiting a “formal response from Iran.” And Iran's official IRNA news agency on Friday cited an unidentified official as saying that Iran's response Thursday was only its view on the deal – and not a definitive answer – as it prepares for a new round of talks. But diplomats familiar with the issue – some from countries directly involved in drawing up the plan – say Tehran's reaction is so far off the mark that they are skeptical the initiative can be salvaged. And if the deal dies, it could kill off even more significant outreach toward Iran. An Oct. 1 meeting between Iran and five world powers, including Washington, was heralded as a tangible reflection of the new US policy of talking with America's enemies. Senior US and Iranian negotiators met one on one separately, and follow-up negotiations were tentatively agreed on – but only if the country signs on to the enrichment plan. Now, instead of planning for new negotiations, talk has turned to a fourth set of UN Security Council sanctions to punish Tehran's nuclear defiance, with British officials saying Friday the council may consider additional penalties early next year. Asked about sanctions, White House press secretary Robert Gibbs replied: “The president's time is not unlimited.” The offer seems simple. With Iran needing fuel for its research reactor, Russia would take most of the Republic's low-enriched uranium and enrich it to the higher level needed to fuel the reactor. France would then turn this material into fuel rods for the Iranian facility. A win-win deal – at least on the surface. Iran would get the fuel it needed for the reactor. And the world could breathe easier after Iran shipped out most of its low-enriched uranium because it would no longer have enough to turn into nuclear warhead material – at least not for the year or so that it would need to replenish its stockpile. It is relatively simple to turn fuel-grade uranium into weapons-grade material – and the West fears that Tehran could decide to do just that. Iran says it is not interested in nuclear arms and wants only to create fuel for a planned network of reactors. But any such network is decades away, meaning Iran has no immediate use for the enriched uranium it has accumulated. That makes its reluctance to ship it out in one shipment and then wait until it is returned in research reactor fuel form all the more vexing. For some, it increases suspicions that Tehran may indeed have other plans for the stockpile. Details of Iran's response to the draft deal drawn up by IAEA chief Mohamed ElBaradei have not been made public. But diplomats familiar with its details say Thursday's Iranian counteroffers are meant to ensure that it gets to keep most of its enriched uranium. Since its clandestine enrichment program was revealed seven years ago, Iran has amassed more than 1.500 kilograms of low-enriched uranium at its cavernous underground facility at Natanz. The ElBaradei plan would commit Iran to turn over more than 1,200 kilograms of low-enriched uranium – more than the commonly accepted amount needed to produce weapons-grade material. If that happens, Iran would not be able to replenish its stockpile to levels that would again yield enough enriched uranium for further enrichment into weapons-grade material for about a year. Instead, Tehran is demanding what diplomats accredited to the IAEA describe as the “slice and dice” or the “dribs and drabs” approach – shipping out a small amount, waiting until it comes back in the form of fuel rods and then exporting the next small batch. Other diplomats say Iran has also offered to enrich what it has to the level needed for the research reactor domestically under IAEA supervision. But both of these approaches are rejected by the US and their allies. The first would leave Tehran with enough material to turn into the fissile core of a nuclear warhead. The second would actually empower it to get part way there because the process of turning out weapons grade uranium becomes simpler with each higher stage of enrichment. While suggesting that it was prepared to discuss the ElBaradei plan further, the IRNA report Friday said it would not ship out most of its uranium and then wait for a return shipment of fuel rods, describing that stance as a “red line” that would not be abandoned. The wording left open whether Tehran was willing to send most of its enriched stockpile abroad if it immediately got fuel rods in return – it would have to wait for up to a year for the material it now possesses to be turned into such rods. But – considering what diplomats say Iran demanded in Thursday's response – the IRNA dispatch is more likely reinforcing the demand that Tehran be allowed to ship out a small batch, wait for it to be turned into fuel rods, and then ship out the next amount. One of the diplomats – who like others interviewed demanded anonymity because his information was confidential – said he had partial sympathy for Tehran's reluctance to give up its “crown jewels.” Iran's enrichment program – and the stockpile of material it has amassed with it – are key pieces of leverage in any talks with the US. Still, for the West, Iran's call for more talks is disheartening. Less than a month ago, Western participants of the Oct. talks – the first negotiations between Iran and six world powers in more than a year – came out that meeting ebullient with what they thought was Iranian agreement in principle to the enrichment deal. But talks in Vienna last week dashed Western hopes that they would cement agreement. Swedish Foreign Minister Carl Bildt, whose country holds told the European Union's rotating presidency, expressed the frustration felt by the West. “It's the same old tricks,” he said. “A back-and
