U.S. Considers Economic Incentives to Iran

In a potential strategy shift, the Bush administration is considering joining Europe in offering Iran (search) economic incentives in exchange for abandoning its nuclear fuel program, the White House said Monday.

In the past, the administration had opposed any rewards for Tehran's cooperation. But President Bush is rethinking the issue after his trip last week to Europe, suggested White House spokesman Scott McClellan.

European leaders urged Bush to join them in offering economic incentives -- including possible eventual membership for Iran in the World Trade Organization (search) -- on the grounds that a united front would be more effective than a continuing U.S.-Europe split over how to persuade Iran to drop its nuclear ambitions.

"There was a lot of discussion about the way forward. The president is thinking through some of the ideas that were discussed. We want to look at how we can be the most helpful in moving the process forward," McClellan said.

Meantime, a British official said Monday that Britain, France and Germany have discussed supplying Iran with commercial aircraft and aircraft spare parts as incentives, in addition to membership in the WTO.

The issue of Iran came up repeatedly during Bush's five day trip to Europe, including at separate meetings between the president and French President Jacques Chirac, German Chancellor Gerhard Schroeder and Russian President Vladimir Putin.

The tactics of incentives -- offering a carrot to Tehran now as well as vowing to use a stick later if necessary -- had been flatly rejected by the administration ahead of the European trip.

Bush in the past has said that Tehran should not be rewarded for violating terms of the Nuclear Non-Proliferation Treaty (search) -- which bars it from enriching spent nuclear fuel to make it suitable for nuclear weapons. Bush has also protested Iran's support of militant groups in Israel like Hezbollah (search).

However, as the trip progressed, Bush seemed to exhibit more flexibility on the topic of incentives.

McClellan told a White House briefing that Bush met with members of his national security team on Friday, the day after he returned from Europe, to discuss the European proposals to offer incentives.

"The president spent a good portion of his time in Europe talking to our European friends about Iran and listening to their ideas. We all share the same goal of making sure Iran does not acquire a nuclear weapon. The president was very much in a listening mode last week," McClellan said.

The spokesman said the president supported diplomatic efforts by Britain, France and Germany to get Iran to abandon any nuclear weapons ambitions. European leaders have urged the United States to join the talks, but there was little indication that the administration was willing to go that far.

On a related issue, McClellan repeated U.S. concerns about a nuclear fuel agreement between Iran and Russia -- signed Sunday -- designed to help Iran fire up its first nuclear reactor by mid-2006.

Iran insists its nuclear program is strictly designed to produce electrical power -- not weapons.

"We have expressed our longstanding concerns about Iran seeking to develop a nuclear weapon under the cover of a civilian nuclear power program," McClellan said.

Still, he said, Russia has insisted that the agreement contains enough safeguards to prevent nuclear materials from being upgraded to weapons quality.

"The Russians previously assured us that no fuel would be delivered until Iran resolves the questions regarding compliance with its international obligations and that any spent fuel must be returned to Russia," McClellan said.

Bush and European leaders agreed that Iran much not be permitted to acquire nuclear weapons. But they were still struggling for common ground over how to achieve that goal.