Is the Bush Administration's preferred IAEA Director going
toe-to-toe with the UN's nuclear watchdog?  While Mahomed ElBaradai is
telling the US to back off in its aggressive nuclear stance with Iran,
the Australian Foreign Affairs Minister is using the threat of
sanctions as a diplomatic weapon.

A week after energy giant General Electric announced its acquisition of Australian-developed uranium enrichment technology (see Justin Tutty's
last post here)   Mr Downer today has supported US State Secretary
Condoleeze Rice's diplomatic proposal by urging Iran to cease the
enrichment of uranium, and engage in a nuclear dialogue with the U.S.

The five permanent UN Security Council members (the U.S., Russia, China, France and Britain) along with Germany are
expected to ratify a package of incentives for Iran to discontinue
uranium enrichment The deal would be proposed ahead of a European
Union?U.S. summit in Vienna at the end of June.  

Under an agreement signed in 2003 Russian uranium used in Iranian nuclear reactors is returned to Russia. 
and in 2005 an IAEA report identified Russia as the ideal site for an
international nuclear repository, with a view to allowing countries
with unstable regimes to  access nuclear-generated electricity while
preventing possible non-peaceful activities.  Greenpeace says that the U.S., Canada and Australia have opposed this plan.

Minister Downer told Parliament yesterday that the new U.S. attitude``institutes a very significant
change in American policy in dealing with Iran and it's a change that
we think is constructive,'' 

``Iran can choose that path and be
rewarded by constructive and full engagement with the rest of the
world, including with the United States,'' Downer said.

He added that if Tehran did not accept the U.S. proposal " Iran will be isolated and there ... is always
the prospect that either through the U.N. Security Council or on
bilateral bases, a series of sanctions including financial sanctions
could be imposed,''

According to The Australian's Greg Sheridan the
Whitehouse considers Australian support of international sanctions
important in gaining support for the idea from other countries.
Sheridan also reports that the Australian Department of Foreign Affairs
and Trade has produced a confidential paper on the Bush
Administration's proposed sanctions.

Iran is currently the
subject of "rogue state" trading sanctions, which prohibit U.S.
corporations and nationals from commerce. The US energy giant
Halliburton circumvents these regulations by engaging with Iran through
its Cayman Islands subsidiary Halliburton Products and Services.  While
the company claims that this subsidiary is operated from Dubai, A CBS
crew were told by a Cayman Islands employee that all mail from Iran was forwarded directly to Houston.

IEA Director ElBaradai said this week that "Our assessment is that there is no immediate threat,  We still
have lots of time to investigate."

"You look around in the Middle East right now and it's a total mess,"
he said. "You can not add oil to that fire."  The 2005 Nobel Peace
Prize winner added that  the recent violent history in Iraq bears an important lesson for
diplomacy with neighboring Iran,and that. "We should not jump
the gun. We should be very careful about assessing the information
available to us,"

Mr
El Baradai also state that the US should not force Iran into a
retaliation to international sanctions, as had occurred with North
Korea.