Iran removed the final seals from equipment at a uranium conversion plant as U.N. inspectors watched Wednesday, paving the way for Tehran to fully open the facility despite European and U.S. calls for it to maintain the suspension of its nuclear program.
The move came as Europe and the United States were struggling to find leverage to stop Iran from forging ahead with its nuclear program, which Washington says secretly aims to develop nuclear weapons. Iran says its program is peaceful, intended only to produce electricity.
Board members of the U.N. nuclear watchdog, the International Atomic Energy Agency (search), canceled a session tentatively planned for Wednesday in Vienna, Austria, signaling how difficult it was for delegates to agree on how to rebuke Iran.
The United States and some European countries had talked of referring Iran to the U.N. Security Council for possible economic sanctions — but that option was fading over concerns it could backfire by hardening Iran's position.
Iran has already said it would rather endure sanctions than back down on a program it says is a matter of national pride.
President Bush said Tuesday he was "deeply suspicious" about Iran's intentions.
Iran began work Monday at its Isfahan Uranium Conversion Facility (search), 255 miles south of Tehran. But some key units at the plant had remained under IAEA seal since a November suspension in activity.
All the seals were removed Wednesday and the agency said it had a surveillance system in place at the facility to keep tabs on the work.
The head of the Atomic Energy Organization of Iran, Gholamreza Aghazadeh (search), told state-run television earlier Monday that work would start at the units as soon as the seals were removed, but he didn't specify in his latest comments whether that had happened.
The reopening of the plant is part of a tough new stance Iran is taking over its nuclear program. It suspended all nuclear activities in November to avoid U.N. sanctions and as a gesture in negotiations with the Europeans, who have trying to persuade Iran to limit its nuclear program.
Over the weekend, Iran rejected European proposals offering economic incentives in return for abandoning its uranium processing facilities.
New hard-line President Mahmoud Ahmadinejad (search) called the offer "an insult," but he said Iran wanted to continue negotiations and would make its own proposals.
Iran has said it won't resume uranium enrichment — the most crucial part of its program — for the time being. Enrichment can produce either fuel for a nuclear power reactor or material for a nuclear bomb.
The Isfahan facility carries out an earlier stage of the process, converting raw uranium — or "yellowcake" — into uranium hexaflouride gas, UF-6, the feedstock for enrichment.
Before the November suspension, the Isfahan facility converted some 37 tons of yellowcake into UF-4, a preliminary stage. Experts say that amount could yield 200 pounds of weapons-grade uranium, enough to make five crude nuclear weapons.
The seals Wednesday were removed from the unit that converts UF-4 to UF-6, meaning it can now complete the conversion for the 37 tons, as well as convert more yellowcake from scratch.
The seals were voluntary, so IAEA inspectors had no choice but to let them be removed, though Iran allowed the installation of surveillance equipment to ensure no nuclear material is diverted.
Iran insists it has the right under the Nuclear Non-Proliferation Treaty (search) to develop the entire nuclear cycle — from uranium ore to fuel for a reactor. But Europe fears that will give it the ability to secretly produce material for weapons.
Europe and the United States were struggling to find a way to get Tehran to back down. Diplomats at the IAEA board of governors held one meeting Tuesday. But a Wednesday session was canceled.
"They need more time," IAEA spokesman Peter Rickwood said. Diplomats were expected to continue negotiations privately on a resolution urging Iran to suspend its latest nuclear activities.
Germany said the removal of the seals at Isfahan brought the standoff to a "critical phase of the process."
The German government "hopes Iran will still take the sensible path and look seriously and constructively at the offer from the [Europeans] and return to the so-called 'status quo ante," spokesman Bela Anda said.
France also urged Iran to again suspend the Isfahan plant.
"This is necessary to restore the confidence of the international community and to allow for a resumption of negotiations," Foreign Ministry spokeswoman Marie Masdupuy said.
The European proposal offered last week to Iran "remains on the table and we invite Iran to give itself time to study it seriously," Masdupuy added.
The European proposals offered a trade-off: Iran would forgo activities on the nuclear fuel cycle, including conversion and enrichment, and in return Europe would guarantee it a supply of fuel for its reactor program, technical help and economic incentives.