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Last Updated: Tuesday, 7 March 2006, 11:09 GMT
China calls on Iran to co-operate
Mohamed ElBaradei at IAEA talks in Vienna
Mohamed ElBaradei says he is hopeful a deal can still be reached
China has urged Iran to co-operate with the UN's nuclear agency to settle a standoff over its nuclear programme.

Chinese Foreign Minister Li Zhaoxing said there was still room to negotiate.

The International Atomic Energy Agency (IAEA) is meeting in Vienna for talks that could pave the way to UN Security Council action against Iran.

US Secretary of State Condoleezza Rice and President George Bush are expected to discuss the issue with the Russian foreign minister in Washington later.

Meanwhile, Iran's President Mahmoud Ahmadinejad has called on the IAEA to compensate his country for the losses it has incurred in suspending its nuclear research over the past two years.

But Mr Ahmadinejad did not say how such compensation should be calculated and failed to mention that Iran's suspension of uranium enrichment had been voluntary, the BBC's Frances Harrison in Tehran says.

There is still time for a settlement of the issue within the framework of the IAEA
Chinese Foreign Minister Li Zhaoxing

China has appealed for all sides in the dispute to remain calm.

Speaking at a press conference in Beijing, Mr Li said: "We hope Iran will cooperate closely with the IAEA and adopt more measures that are helpful to building confidence.

"There is still time for a settlement of the issue within the framework of the IAEA."

Iran had the right to peaceful nuclear energy, he added, but must meet its obligations under the Non-Proliferation Treaty (NPT).

Russia and China - permanent members of the Security Council with the power of veto - have so far opposed imposing sanctions on Iran.

The BBC's Bethany Bell says some diplomats at the IAEA, including its head, Mohamed ElBaradei, appear cautiously optimistic that an agreement on Iran's sensitive uranium enrichment work could still be within reach.

'Complete suspension'

In Washington, the nuclear standoff with Iran is likely to be high on the agenda for talks with Russia's Foreign Minister Sergei Lavrov.

Under a new Russian proposal, Iran would be permitted to undertake small-scale uranium enrichment without obtaining the technology to build nuclear weapons.

Technicians at Iran's Bushehr nuclear reactor
Iran insists its nuclear programme is purely peaceful

The US has said that only a complete suspension of Iran's nuclear activities would be acceptable in order to avoid UN Security Council action.

Western powers believe Iran wants to develop nuclear arms, a claim it denies.

Tehran insists it has the right to develop its nuclear sector to produce energy for civilian purposes.

Speaking after the first day of IAEA talks in Vienna on Monday, Mr ElBaradei said the Iran nuclear issue had serious implications for world peace.

He urged continued negotiations and said escalation of the situation would not help.

Iran has warned that if the UN Security Council becomes involved, it will resume full-scale nuclear enrichment - a process which can lead either to material for civilian nuclear reactors or to nuclear bomb components.

Leaked report

The IAEA has demanded Iran suspend nuclear enrichment completely.

The IAEA meeting is expected to discuss a report by Mr ElBaradei on Tuesday or Wednesday, leaked to the media last week, which says the Iranians have begun feeding uranium gas into centrifuges.

It also says Tehran has rejected stricter inspections, and has hindered inspectors' work.

Three years of negotiations between Iran and the EU, and the latest round of talks between Moscow and Tehran, have brought no significant result.

Iran resumed enrichment in January after a two-year hiatus.

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