Special ReportsPublished on Sep 15, 2003
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Nuclear Iran and the US: A Status Report



Nuclear Iran and the US: A Status Report

Since the early 1990's the nuclear non-proliferation regime, the centerpiece of which is the NPT, has grappled with an increasing number of threshold nuclear weapons states. The most recent case is of Iran which is believed to be pursuing a program for weapons of mass destruction. This is complicated by the fact that the US has a troubled relationship with Iran. This Issue recommends that the US and other western powers adopt a cooperative approach with Iran that co-opts it in the regime rather than isolating Iran in the international system. This Issue Brief is intended to serve as background material for understanding some of these nuances.

Since the early 1990’s the nuclear non-proliferation regime, the centerpiece of which is the NPT, has grappled with an increasing number of threshold nuclear weapons states. The most recent case is of Iran which is believed to be pursuing a program for weapons of mass destruction. This is complicated by the fact that the US has a troubled relationship with Iran. This Issue recommends that the US and other western powers adopt a cooperative approach with Iran that co-opts it in the regime rather than isolating Iran in the international system. This Issue Brief is intended to serve as background material for understanding some of these nuances.

For many years, the US had expressed concerns about the Iranian nuclear weapons program. Additionally, in 2000, the US State Department designated Iran as the most active state sponsor of terrorism, providing increasing support to numerous terrorist groups, including the Lebanese Hizbollah, HAMAS and the Palestine Islamic Jihad (PIJ), which seek to undermine the Middle East peace negotiations through the use of terrorism. 1 These efforts received renewed impetus following U.S. President George W. Bush’s State of the Union address on January 29, 2002, where he identified Iran as part of an ’axis of evil’, further stating that Iran ’exports terror’ and ’aggressively pursues weapons of mass destruction’, making it a ’grave and growing danger’ to the United States of America.

On September 8, 2003, Mohammed ElBaradei, Director General of IAEA (International Atomic Energy Agency), submitted a 10-page report that enunciated the presence of an underground Iranian uranium-enrichment facility holding about 1,000 gas centrifuges and the capacity to accommodate more than 1,000 people. U.S. officials are slated to use this IAEA special report to press for urgent action to prevent Iran from acquiring an atom bomb, as fears mount that Tehran is on course to develop a nuclear-weapons capability within two years. 2 Although the Bush administration last week decided against seeking a UN resolution, finding Iran in noncompliance of its IAEA obligations, the U.S. is stepping up the political pressure to force Tehran to come clean about its nuclear program.

Iran’s Nuclear Estate

For the past decade and more, Iran has been trying to complete a nuclear power reactor at Bushehr. The revolutionary Islamic regime of Ayatollah Khomeini that acquired power in Iran in 1979 inherited two partially completed, German-supplied nuclear power reactors at Bushehr. 3 Immediately after assuming power, Khomeini stalled the construction of these reactors. The structures were severely damaged by Iraqi bombing during the 1980-88 Iran-Iraq war. In 1991, then Iranian President, Hashemi Rafsanjani, expressed the desire to complete construction of the reactors, but Germany refused, because of Iran’s apparent interest in nuclear weapons. 4 Thereafter, Iran sought assistance for the task from China and Brazil. Eventually, in 1995, Iran signed a US $ 800 million deal with Russia to finish the first of the two units by 2001. Under the contract, Russia is also to provide low-enriched uranium fuel for a period of 10 years, starting 2001, at an annual cost of US $ 30 million, plus technical training. 5 Many western scholars deem Russian assistance as a cover up to develop more sensitive nuclear facilities as energy requirements can be met by much easily available natural gas resources. In early 2001, when Washington was convinced of the Iranian intentions of acquiring nuclear arms, it succeeded in discouraging Russia to hold up the export of lasers that could have been used for enriching uranium from its natural state to weapons grade. It was also believed that the inspection regime of the IAEA could prevent further progress of Iranian nuclear program. In September 2002, at a regular session of the IAEA General Conference the Iranian Vice President R. Aghazadeh, had stated that Iran was ’embarking on a long term plan to construct nuclear power plants with a total capacity of 6000 MW within two decades’. There had been media reports in August 2002 about underground nuclear facility at Natanz and heavy water production plant at Arak. The IAEA sought visits of Director General and Director of the Division of Safeguards Operations in February 2003. The IAEA Director General was informed by Iran of its uranium enrichment program which was described as two new facilities located at Natanz [a pilot fuel enrichment plant (PFEP) and a large scale commercial scale fuel enrichment plant (FEP)] under construction. Iran also confirmed that the heavy water production plant was also under construction in Arak. 6 It was also after repeated enquires from the Agency (IAEA) and after confirmation from the supplier State that Iran acknowledged receiving natural Uranium in 1991 that had not been reported to the Agency in the past. This was in the form of UF6 (1000kg) and UF4 (400kg) and UO2 (400kg). At present, this is stored at the previously undeclared Jabr Ibn Hayan Multipurpose Laboratories (JHL), located at the Tehran Nuclear Research Centre (TNRC). 7 Subsequently, Iran informed the Agency that it had converted most of the UF4 into Uranium in 2000 at JHL. In the discussions between the IAEA team and the Iranian authorities, a reference about open source information on the possible conduct of enrichment activities at the workshop of the Kalaye Electric Company in Tehran had also emerged. Iranian authorities had conceded that the workshop had been utilized for the production of centrifuge components but stated that ’there had been no operations in connection with its centrifuge enrichment development program involving the use of nuclear material, either at the Kalaye Electric Company or at any other location in Iran’. 8 It bears mention that a centrifuge component production facility is required to be declared to the IAEA under Iran’s NPT Safeguards Agreement. But in light of the present situation, Iran was requested an IAEA team’s visit to the facility for collection of environmental samples. Initially, Iran declined the request, as they deemed the same obligatory only when an Additional Protocol was in force. However, subsequently, they agreed to permit access to the workshop. According to Iranian officials, Iran intends to install some 7,000 megawatts of nuclear electrical generating capacity over the next 20 years, which will require a substantial investment in a wide range of peaceful nuclear activities. 9


Article 8 of Iran’s Safeguards Agreements requires that Iran provide the IAEA with information ’concerning nuclear material subject to safeguards under the Agreement and the features of facilities relevant to safeguarding such material’. In addition, in Article 34 (c) of the Safeguards Agreement the nuclear material of a composition and purity suitable for fuel fabrication or for being isotopically enriched and any nuclear material produced at a later stage in the nuclear fuel cycle are subject to all of the safeguards procedures specified in the Agreement. 10 Furthermore, a time limit, ’as early as possible before nuclear material is introduced into a new facility’ (Article 42). The Subsidiary Arrangements, partly in force with Iran from 1976 to 26 February 2003, had a standard text. 11 On 26 February 2003, Iran accepted modifications to the subsidiary arrangements proposed by the Agency. 12 The IAEA is of the considered view that Iran was under obligation to report the transfer of UF6, UF4 and UO2 in 1991 under the requirement of inventory changes. In a letter in February 2003, Iran, confirming receipt of the materials said that its interpretation of Articles 34 (c) and 95 of the Safeguards Agreement had been that no reporting to the Agency was required since the total amount of Uranium did not exceed one kilogram. The IAEA, however, maintains that all material must be reported to the Agency under the inventory change reports (ICR’s) and that Article 95 additionally imposes the requirement of advance notification with respect to imports of material in excess of one effective kilogram.

US policy of regime change in Iran

At present, relations between Iran and the United States are at their nadir since the Tehran hostage crisis of 1981. Hence, it would be worthwhile to note that the American penchant in seeking to change regimes that are not to America’s liking commenced more than a century ago, when in the aftermath of the Spanish-American War, the United States found itself responsible for Cuba, Puerto Rico and the Philippines. Once colonialism was discredited, the United States adopted a different approach, with the C.I.A. rather than the United States military at the vanguard. 13 The first of these attempts, which occurred during the week 16-22 August 1953, the C.I.A. and the Secret Intelligence Service, toppled the democratically elected Iranian Prime Minister, Mohammed Mossadegh. Mossadegh’s government had nationalized the Anglo-Iranian Oil Company in protest against working conditions and British unwillingness to share profits evenly. The British government convinced US President Eisenhower that Mossadegh was leading Iran towards communism. It won American backing to restore the Shah to power and put Iranian oil under an international consortium. That short-term success came at a painful long-term cost. 15 The Shah’s brutality after his return inspired the anti-American Islamist fundamentalists who burst forth in 1979 and have flourished ever since.

The interaction between Washington and Tehran, deeply troubled since 1979, had turned a bit positive for a brief period after Mohammed Khatami became President of Iran in 1997. As Khatami’s reform program got under way, the then U.S. President Bill Clinton seemed to be readying itself for a re-engagement with Iran. 16 Statements were issued by both sides which, though not overly effusive in tone, at least indicated a mutual desire to instill a level of normalcy into the approach each side wished to adopt in respect of the other. However, as Khatami’s reform movement stalled, the U.S. administration appeared unable to make up its mind as to how it should proceed.

Suspicion and distrust of the other’s intention has governed the Iranian-American relations. The Bush administration established its contacts with the government of President Mohammed Khatami, and the Iranian foreign ministry, but more hard-line elements, such as the Revolutionary Guards, intelligence and military agencies (not under Khatami’s control) maintained an anti-American and anti-Israeli orientation. Thereafter, Iran’s supreme leader, Ayatollah Ali Khamenei, called America ’The Great Satan’, while for President George W. Bush, Iran formed part of an ’axis of evil’, seeking weapons of mass destruction with which to threaten the world. 17

By including Iran in the ’axis of evil’ in his State of Union Address in January 2002, U.S. President George W. Bush put an end to his administration’s hitherto delicate exploration of closer ties with Tehran. Prior to the speech, the U.S. had been considering an easing of some economic sanctions on Tehran. 18 But, that could not be sustained in the aftermath of the series of jolts that the US blamed on Iran. The heaviest blow came in early January, when Israeli commandos intercepted a ship in the Red Sea that U.S. and Israeli intelligence officials claimed was smuggling weapons provided by Iran to Palestinian leader Yasser Arafat’s government. 19

In May 2003, US Secretary of Defense Donald Rumsfeld, who aggressively supports the policy of regime-change in Iran, charged Iran with harboring Al-Qaeda members and developing nuclear weapons. 20 Thereafter, U.S. officials confirmed in July 2003 that Iran had deployed the new Shihab-3 missile, capable of hitting Israel, Iraq, Afghanistan, Turkey and Pakistan. 21 At a White House meeting in June 2003, Israel’s Prime Minister Ariel Sharon had warned of an Israeli pre-emptive strike against one or more Iranian nuclear facilities. Reportedly, Israel has mapped out a route its jet fighters would take to destroy Iran’s two-reactor nuclear plant at Bushehr. 22 In addition, the Pentagon officials talked ’unofficially’ about what action would need to be taken in order to knock out that facility. 23

President Bush has asserted that America ’will not tolerate’ Iran building nuclear weapons, and some hawks close to the Bush Administration are pressing for America to take military action if necessary to stop Iran doing so. 24 Pentagon officials, in particular, have declined to rule out use of force. 25 However, it would certainly be in the long term interest of the fragile peace in West Asia if the problem could be resolved peacefully through negotiation and cooperation with the IAEA. The UN, European Union (EU) and Russia (which is helping Iran build a nuclear power station at Bushehr on the Gulf coast) have been pressing Iran to sign an Additional Protocol under the NPT, which would allow the IAEA’s inspectors to make more stringent inspections. The EU specifically wants Iran to permit challenge inspections from IAEA on its facilities without prior notice. 26 The EU Foreign Minister, Javier Solana, in Iran in August, told them bluntly that Tehran’s trade relations with the EU would suffer unless it unconditionally opened up all its suspected nuclear weapon manufacturing facilities to the IAEA inspections. 27 Iran is also being pressurized by influential EU members to sign the Additional Protocol. Meanwhile, the German Chancellor, Gerhard Schroeder, has appealed to Iran to cooperate with the IAEA by providing a complete account of its nuclear activities.

In August 2003, Japan had vowed to press ahead with a US $ 2 billion oil deal in Iran’s Azadegan oil field, so long as it was deemed commercially viable, despite US pressure to withdraw from the investment, as Japan regarded the issues of oil and nuclear as separate. Also, Iran could provide 6 per cent of Japan’s oil imports, reducing its dependence on Arab oil from 75 to 69%. 28 However, Japan now appears to be backtracking, for evidently, US-Japan relationship has been too important to endanger.

Russia’s technology sales to Iran and its assistance in the construction of Iran’s first nuclear reactor have been major points of contention between Moscow and Washington and have added to the existing tensions over Russia’s refusal to support the U.S.-led war in Iraq. 29 It would be worthwhile to note that during early 1995, Russia proceeded with its contract to assist Iran construct a nuclear reactor at Bushehr. Tensions arose with Russia when the Clinton administration learned in March-April 1995 that, as part of a secret protocol for the reactor sale contract, Russia had agreed to provide Iran with a gas-centrifuge uranium-enrichment facility. 30

While Iran has asserted that it would not yield to international pressure over its nuclear program, which it insists is not weapon-oriented, Tehran would find it tough to brush aside the mounting pressure from the EU. 31 With the U.S. snapping ties with Iran, the E.U. has emerged as Iran’s biggest trading partne


U.N. inspectors are particularly concerned about the activity at the Natanz facility, which has sophisticated equipment for enriching uranium to weapons-grade standard. Even though the complex was built five years ago, the Iranian authorities confirmed its existence to the IAEA earlier this year, only after Iranian exiles revealed its location. 32 U.N. inspectors who visited the site – due to be operational in 2005 – discovered an underground complex capable of holding more than 1,000 personnel. 33

If past trends are of any indication, Iran’s acquisition of nuclear weapons is inevitable. Viewed from Iran’s point of view, there are de-facto nuclear weapons states in its neighborhood (Pakistan, Israel and the CIS states); the investment, therefore, in terms of creating a scientific bureaucratic conclave, establishing a nuclear infrastructure, the capital and the political costs that go with it are too high for Iran to contemplate a rollback. It is highly plausible that over the next few months, Iran will invariably acquire adequate potential to develop nuclear weapons without any external assistance. It would therefore be in the interest of the US and other western powers to devise an accommodative approach as opposed to a confrontationist mechanism for dealing with Iran, instead of denying Iran’s incumbent nuclear program.


1 ’’Overview of State-Sponsored Terrorism,’’ released by the Office of the Coordinator for Counterterrorism, US Department of State, 30 April 2001.

2 Con Coughlin, ’’U.N. Report describes expansive nuclear facility,’’ The Washington Times, 8 September 2003.

3 Joseph Cirincione, Jon B. Wolfsthal, Miriam Rajkumar & Jessica T. Mathews, ’’Iran’’, in Joseph Cirincione, Jon B. Wolfsthal, Miriam Rajkumar & Jessica T. Mathews (ed), Deadly Arsenals, (Washington: CEIP, 2002), p. 258.
4 Ibid.

5 Ibid.

6 Under the comprehensive NPT Safeguards Agreements heavy water production facilities are not nuclear facilities and hence not required to be declared to the Agency.

7 Report by the Director General, "Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran" IAEA Document GOV/2003/40, 6 June 2003.

8 Ibid.

9 David Albright & Corey Hinderstein, "Iran: Player or Rogue", Bulletin of the Atomic Scientists, September/October 2003, Volume 59, No. 5, pp.52-53.

10 This implies that it is required by Iran to report the changes in the inventory of nuclear material.

11 This called for provision to the Agency of design information on a new facility no later than 180 days before the introduction of nuclear material into the facility.

12 ’This required Iran to inform the Agency of new nuclear facilities and modifications to existing facilities through the provision of preliminary design information as soon as the decision to construct, to authorize construction or to modify has been taken and to provide the Agency with further design information is to be provided early in the project definition, preliminary design, construction and commissioning phases.’ Report by the Director General, "Implementation of the NPT Safeguards Agreement in the Islamic Republic of Iran" IAEA Document GOV/2003/40, 6 June 2003.

13 Ibid.

14 This incident is brilliantly reconstructed by Stephen Kinzer, in All the Shah’s Men: An American Coup and the Roots of the Middle East Terror, (New York: John Wiley, 2003), pp 272.

15 ’’How to change a regime in 30 days,’’ The Economist, 16-23 August 2003.

16 Kesava Menon, ’’Turning to Iran,’’ Frontline, Vol. 20, Issue 12, 20 June 2003.

17 ’’Befriending the Great Satan,’’ The Economist, 13 May 2003.
18 Alan Sipress, ’’Bush’s Speech Shuts Door on Tenuous Opening to Iran,’’ Washington Post, 4 February 2002.

19 Ibid.

20 Tony Karon, ’’Is Iran Next?’’ Time International, 30 May 2003.
21 ’’Danger from Tehran,’’ The Washington Times, 3 September 2003.

22 Ibid.

23 ’’Danger from Tehran,’’ The Washington Times, 3 September 2003.

24 ’’ElBaradei’s critical mission,’’ The Economist, 10 July 2003.

25 ’’Danger from Tehran,’’ The Washington Times, 3 September 2003.

26 Atul Aneja, ’’Pressure on Iran over n-issue,’’ The Hindu, 2 September 2003.

27 Ibid.

28 David Pilling, The Financial Times, 19 August 2003.

29 Ron Synovitz, U.S./Russia: Rice Expects Bush-Putin Summit to Address Iranian Nuclear Issues, Iran Focus, 30 May 2003.

30 Miriam Rajkumar; Jon B. Wolfsthal; Jessica T. Mathews; Joseph Cirincione, ’’Iran’’, in Miriam Rajkumar; Jon B. Wolfsthal; Jessica T. Mathews; Joseph Cirincione (ed.), Deadly Arsenals, (Washington: CEIP, 2002), p. 261.

31 Atul Aneja, ’’Pressure on Iran over n-issue,’’ The Hindu, 2 September 2003.

32 Con Coughlin, ’’U.N. Report describes expansive nuclear facility,’’ The Washington Times, 8 September 2003.

33 Ibid.

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