Tehran’s determination to pursue a nuclear program showed no sign of wavering despite Western sanctions that are inflicting increasing damage on its oil-based economy.

“The era of bullying nations has passed. The arrogant powers cannot monopolize nuclear technology. They tried to prevent us by issuing sanctions and resolutions but failed,” President Mahmoud Ahmadinejad said in a television broadcast on Wednesday.

“Our nuclear path will continue.”

But Iran’s Arabic-language Al Alam television said the government had handed a letter to EU foreign policy chief Catherine Ashton expressing readiness to “hold new talks over its nuclear program in a constructive way.”

An Ashton spokeswoman confirmed receipt of the letter, saying she was evaluating it and would consult the United States, Russia, China and other partners among the big powers.

Iran has long refused to negotiate curbs on its nuclear program, saying it is intended purely for civilian uses, including producing electricity for booming domestic demand.

The United States and Israel have not ruled out military action against Iran if diplomacy and sanctions fail.

Washington played down Iran’s announcement, saying the advances were neither new nor very impressive. “We frankly don’t see a lot new here. This is not big news. In fact it seems to have been hyped,” a State Department spokeswoman said.

IRAN DENIES BANNING OIL EXPORTS TO EU

Iran’s Oil Ministry denied a state media report that it had cut off oil exports to six EU states. “We deny this report … If such a decision is made, it will be announced by Iran’s Supreme National Security Council,” a ministry spokesman said.

Iran’s English language Press TV had said Tehran had halted oil deliveries to France, Portugal, Italy, Greece, Netherlands and Spain — its biggest EU customers — in retaliation for an EU ban on Iranian crude due to take effect in July.

The Islamic Republic is the world’s No. 5 oil exporter, with 2.6 million barrels going abroad daily, about a fifth of it to EU countries.

Western sanctions are spreading to block Iran’s oil exports and central bank financing of trade, and Tehran has resorted to barter to import staples like rice, cooking oil and tea, commodities traders say.

The Obama administration is putting pressure on the European Union and SWIFT, the global organization that facilitates most of the world’s cross-border payments, to expel Iranian banks from its network, a new step in the push to deprive Iran of funds, a U.S. official said on Wednesday.

Expelling Iranian banks from the Belgium-based Society for Worldwide Interbank Financial Telecommunication would cut off one of Iran’s few remaining avenues to do business abroad.

European banking regulators may meet SWIFT’s board on Thursday to discuss the issue, two sources familiar with the matter said. SWIFT has said previously it is working to resolve the issue but is just a messaging system for its 10,000 users.

The most recent talks between world powers and Iran failed in January 2011 because of Tehran’s unwillingness to discuss transparent limits on enrichment, as demanded by several U.N. Security Council resolutions passed since 2006.

The nuclear achievements proclaimed by Tehran involved a new line of uranium enrichment centrifuges and the loading of its first domestically produced batch of fuel into a research reactor that is expected to run out of imported stocks soon.

Tehran has for some years been developing and testing new generations of centrifuges to replace its outdated, erratic “P-1″ model. In January it said it had successfully manufactured and tested its own fuel rods for use in nuclear power plants.

“FOURTH GENERATION” CENTRIFUGE

Ahmadinejad said the “fourth generation” of centrifuge would be able to refine uranium three times as fast as previously.

If Iran succeeded in introducing modern centrifuges for production, it could significantly shorten the time needed to stockpile enriched uranium, which can generate electricity or, if refined much more, produce nuclear explosions.

Last year, Iran installed two newer models for large scale testing at a research site near the central town of Natanz.

But it remains unclear whether Tehran, under increasingly strict trade sanctions, has the means and components to make the more sophisticated machines in industrial quantity.

“We have seen this before. We have seen these announcements and these grand unveilings and it turns out that there was less there than meets the eye. I suspect this is the same case,” said Shannon Kile at the Stockholm International Peace Research Institute (SIPRI).

However, Ahmadinejad said Iran had increased the number of centrifuges at its main enrichment site at Natanz to 9,000.

In its last report on Iran, in November, the U.N. nuclear watchdog said there were 8,000 installed centrifuges at Natanz, of which up to 6,200 were operating.

France said Tehran’s latest moves again demonstrated that it would rather ignore international obligations than cooperate.

A British Foreign Office spokesman said: “(This) does not give any confidence that Iran is ready to engage meaningfully on the international community’s well-founded concerns about its nuclear program. Until it does so we’ll only increase peaceful and legitimate pressure on Iran to return to negotiations.”

Russia said global powers must work harder to coax concessions from Iran, warning that Tehran’s willingness to compromise was waning as it makes progress toward the potential capability of building nuclear warheads.

Deputy Foreign Minister Sergei Ryabkov said U.N. sanctions and additional measures introduced by Western nations had had “zero” effect on Iran’s nuclear program.

Iran has threatened retaliation for any attack or effective ban on its oil exports, suggesting it could seal off the main Gulf export shipping channel, the Strait of Hormuz, used by a third of the world’s crude oil tankers.

NEW FUEL FOR RESEARCH REACTOR

State television aired live footage of Ahmadinejad loading Iranian-made fuel rods into the Tehran Research Reactor and called this “a sign of Iranian scientists’ achievements.”

The Tehran reactor produces radio isotopes for medical use and agriculture. Iran says it was forced to manufacture its own fuel for the reactor after failing to agree terms for a deal to obtain it from the West.

In 2010, Iran alarmed the West by starting to enrich uranium to a fissile purity of 20 percent, saying this was for reprocessing into special fuel for the Tehran reactor.

A 3.5 percent level is enough to power nuclear power plants, and the move to 20 percent purity brought Iran significantly closer to the 90 percent needed for a nuclear warhead.

Analysts remained doubtful that Iran would be able to operate the research reactor with its own special fuel.

“As usual, the announcement surely is exaggerated. Producing the fuel plates … is not so hard. But the plates have to be tested for a considerable period before they can be used safely in the reactor,” said Mark Fitzpatrick of London’s International Institute for Strategic Studies.

“If Iran is really running the reactor with untested fuel plates, then my advice to the residents surrounding the building would be to move somewhere else. It will be unsafe.”

Spent fuel can be reprocessed into plutonium, the alternative key ingredient in atomic bombs. But Western worries about Iran’s nuclear program have focused on its enrichment program, which has accumulated enough material for several bombs, in the view of nuclear proliferation experts.

Analysts say the fuel rod development does not bring Iran any closer to producing nuclear weapons, but could be a way of telling its enemies that time is running out for a negotiated solution to the dispute.

Iran appears to have overcome one serious recent obstacle to nuclear development by succeeding in neutralizing and purging the “Stuxnet” computer virus from its nuclear machinery, European and U.S. officials and private experts told Reuters. Many believe Israeli operators planted the virus. The Himalayan

Quoting the official news agency, The New York Times reports that Ahmadinejad will likely “proclaim that a new uranium enrichment plant built inside a mountain near the holy city of Qum was ‘fully operational.’”

The Times adds:

    “The announcement appeared timed to convey the defiant message that the increasingly harsh Western economic sanctions imposed on Iran were having no effect on the government’s determination to proceed with its nuclear program. The United States, Europe and Israel have all called the program a cover for Iranian efforts to develop nuclear weapons capability, an accusation that Iran denies.

    “The new uranium enrichment plant, known as Fordo, has raised Western concerns because it is buried deep underground, making it more impervious to scrutiny. The Fordo plant also has elevated distrust of Iran because the plant’s construction had been kept a secret until Western intelligence confirmation of its existence forced the Iranians to acknowledge the plant in September 2009, just as President Obama and European allies were announcing it. The Iranians said at the time that they had always intended to reveal the plant’s existence.”

The BBC reports that senior national security official Ali Baqeri noted that Iran will also load Iranian-made nuclear fuel rods into the Tehran Research Reactor. The BBC makes much the same point as the Times: About two years ago talks to provide Iran with rods for the reactor collapsed and this announcement was likely meant to send the West a message that the sanctions will not deter Iran from trying to “master nuclear technology on its own.”

Now, it’s important to note that announcements of this kind by Iran have in the past amounted to empty boasts.

Also of note is that Iran is set to meet with the International Atomic Energy Agency in Tehran on Feb. 20 and 21. Reuters reports that the IAEA has been working its diplomatic channels to try to convince Tehran to be more transparent about its nuclear activity.

Update at 7:29 a.m. ET. Ahmadinejad Makes Announcement:

The AP and Reuters are reporting that President Ahmadinejad just made the announcement that the Tehran reactor has been loaded with domestically produced nuclear fuel rods. By Eyder Peralta, NPR

Iran “will respond with full force to any aggression or even threats in a way that will demolish the aggressors from within,” Ayatollah Ali Khamenei told students at a Teheran military college. Khamenei said the message was directed at Iran’s enemies, “especially America and its stooges and the Zionist regime (Israel).”

U.S. Defense Secretary Leon E. Panetta considers military strike would lead to serious impact.

In Washington, Panetta said a military strike on Iran would have a “serious impact” on the Middle East and possibly on American forces in the region, without seriously disrupting Iran’s nuclear program.

“You’ve got to be careful of unintended consequences here,” Mr. Panetta said, reiterating the Obama administration’s view that diplomatic pressure and international sanctions were the preferred courses of action.

A report by the International Atomic Energy Agency (IAEA) citing “credible” evidence said this week that Iran has been engaged in projects and experiments relevant to development of nuclear weapons.

At the United Nations on Thursday, Ban Ki-moon, the secretary general, pleaded for restraint on all sides, apparently in reaction to the speculation that Israel may attack suspected Iranian nuclear facilities.

A United Nations spokesman, Martin Nesirky, said that Mr. Ban had reiterated “his belief that a negotiated rather than a military solution is the only way to resolve this issue,” Reuters reported.

The United States, France and Britain have said the Iranians must answer the questions raised in the United Nations report or face further penalties, beyond the four rounds of sanctions already imposed by the United Nations Security Council.

But the prospects for further Security Council sanctions are bleak at best because of objections by Russia and China. All five powers are veto-wielding members of the Security Council. By Evelyn Lin, Taiwan News

In its latest report on Iran, the International Atomic Energy Agency  says the research includes computer models that could only be used to develop a nuclear bomb trigger.

The BBC  says this is the IAEA’s toughest report on Iran to date.

Tehran condemned the findings as politically motivated.

“This report is unbalanced, unprofessional and prepared with political motivation and under political pressure by mostly the United States,” said Ali Asghar Soltanieh, Iran’s envoy to the IAEA.

It was “a repetition of old claims which were proven baseless by Iran in a precise 117-page response, ” he added.

Iran says its nuclear programme is solely to generate civilian power. The Nation

After the 1986 Chernobyl disaster, 1250 of the workers called in to deal with it later killed themselves out of fear of the consequences for themselves or their children.

An extensive study of the health aftermath of the disaster was carried out in 2005 by the Chernobyl Forum, made up of scientists from Europe, the UN, the World Health Organisation and the Food and Agricultural Organisation, the International Labor Organisation and the International Atomic Energy Agency.

The forum’s task was to study all available epidemiological data to measure the levels of death, disease and economic damage caused by Chernobyl.

About 57 people, mainly power-plant staff and emergency workers, died in the explosions or within months from burns or the severe radiation poisoning they suffered on the night of the April 26, 1986, disaster.

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Most emergency workers and people living in the contaminated areas received relatively low doses of radiation compared to natural background levels.

However, 350,000 people moved out of affected areas found relocation traumatic.

A paralysing sense of fatalism among those even lightly affected led them to accept exaggerated fears about the likely damage to their health.

Fears of birth defects prompted between 100,000 and 200,000 women in Western Europe to have abortions in the years after the accident.

The study concluded that about 4000 people, most of whom were children or adolescents at the time of the disaster and who lived in areas with the highest radiation levels, would eventually die from cancer caused by radiation.

Of 6.8 million other people living further from the power station and who received much lower doses, a further 5000 might be killed by that radiation.

Cancer caused about a quarter of all deaths in Europe and Chernobyl was likely to account for 0.01 per cent of those cancer deaths.

The 1979 Three Mile Island radiation leak and partial meltdown triggered a spontaneous evacuation of the surrounding area of Pennsylvania but studies indicate the radiation hurt no one. Brendan Nicholson, The Australian

Lithuania agreed to close the plant as part of a deal to joining the European Union in 2004.

The plant was built in the 1980 and is considered by many to be unsafe since it shares design flaws with the Chernobyl unit that exploded in 1986. The Ignalina plant’s first reactor closed in December of that year.

Engineers at Lithuania’s Soviet-built nuclear power plant began shutting down a Soviet-build nuclear reactor Thursday as part of an agreement with the European Union, which considers the Chernobyl-type machine unsafe.

The shutdown has been greeted with anguish across Lithuania, as the recession-hit country will lose a source of cheap electricity and be forced to import more expensive energy.

The Ignalina nuclear plant in the town of Visaginas is scheduled to cease producing electricity at one hour before midnight local time (2100 GMT; 4 p.m. EDT).

Its last working reactor – ordered closed by the EU because it is considered too similar to the one that exploded at Chernobyl in 1986 – boasts a capacity of 1,320 megawatts, making it one of the largest nuclear reactors in the world.

Lithuania – one of the two most nuclear-energy dependent nations along with France – had been hoping that the EU would allow it to keep the plant open for another two to three years, but Brussels, which demanded the reactor’s shutdown as part of Lithuania’s membership agreement, flatly refused.

“We are keeping our word to our European partners,” Energy Minister Arvydas Sekmokas said during a visit to the plant on New Year’s Eve.

In April 1986, an earlier, smaller version of the RBMK reactor at Ignalina exploded in Chernobyl, Ukraine, casting a fallout cloud over a wide swathe of Europe. It remains the world’s worst civilian nuclear catastrophe.

According to the shutdown plan, output at the Ignalina unit will be reduced from 1,320 megawatts to 700 beginning at 8 p.m. local time (1800 GMT; 1 p.m. EDT) and switched off completely at 11 p.m (2100 GMT; 4 p.m. EDT).

“We will witness an unprecedented event today as Lithuania becomes the first country in the world to abandon nuclear energy completely,” said Viktor Shevaldin, the plant’s chief. “Only Armenia knows what it means to lose this power – it had to shut down its reactor after an earthquake but reopened it after six years.”

Residents in Visaginas, a town of 25,000, are frustrated that Lithuania will lose the cheap energy source.

“I don’t understand it. Why throw away a good thing that could still serve for years?” said Aleksei Tichomirov, a 47-year-old engineer who moved to Lithuania in the 1980s when the plant was built.

“This is my last day at work. There is no job in Visaginas for people like me,” he said.

The Ignalina plant supplied over 70 percent of Lithuania’s electricity needs – only France receives more of its kilowatt needs from nuclear power.

The Baltic nation of 3.4 million people will cover the shortfall by buying power on the open market from Estonia, Belarus, Ukraine and Russia.

By 2013, Lithuania hopes to build a new natural-gas power plant, but that would not be enough to meet its own energy needs.

Many Lithuanians are worried that they will become dependent on Russian gas supplies, which they fear may stop without warning given Russia’s snap decisions in the past to shut off supplies to Ukraine.

However, Prime Minister Andrius Kubilius does not share the view.

“Lithuania could have done its homework better preparing for the closure, but it won’t be left without energy next year. I believe our country, together with its Baltic neighbors, will have an energy market similar to the Nordic countries and other EU regions,” he told Lithuanian Radio. The Wichita Eagle

Medvedev said the new missiles would be developed in full accordance with arms agreements made with the United States. “Of course, we will develop new systems, including delivery systems, that is, missiles,” Medvedev said in an end-of-year interview with state-controlled television channels.

“This process will be continued, and our nuclear shield will always be efficient and sufficient to protect our national interests,” Medvedev said.

The Kremlin chief said Russia and the United States were close to a new deal on reducing vast Cold War arsenals of nuclear weapons, adding that he had “trustworthy relations” with US President Barack Obama. Zeenews

He urged Ahmadinejad to “continue contacts with interested countries for a just and balanced solution on the nuclear issue in Iran”.

In his weekly radio address earlier, Lula said engaging Iran instead of isolating it was the way to push for peace and stability in the Middle East.

“It doesn’t help isolating Iran,” he said. “It’s important that someone sits down with Iran, talks with Iran and tries to establish some balance so that the Middle East can return to a certain sense of normalcy.”

Lula, who honed his negotiating skills as a union leader, says a new tactic is needed with the Iranians.

“I told President [Barack] Obama, I told President [Nicolas] Sarkozy, I told [German] Chancellor Angela Merkel that we will not get good things out of Iran if we corner them. You need to create space to talk,” he said last month.

During his radio show, Lula also proposed a football game in March pitting Brazil’s famed national team against a team comprising Israelis and Palestinians.

Security council ‘failure’

Ahmadinejad, for his part, supported Brazil’s bid to become a permanent member of the UN Security Council.

Brazil is to take one of the 10 non-permanent seats – those without the power of veto – in 2010 and 2011.

“We support a reformed UN Security Council and for Brazil to have a permanent seat,” Ahmadinejad said.

He said the council “has failed over the past 60 years because of the veto power of a small number of countries, a source of insecurity for several countries in the world”.

The first visit by Ahmadinejad to Brazil provides Lula an opportunity to boost the international political clout of South America’s largest nation, analysts said.

But Brazilian opposition politicians criticised it, citing concern over Iran’s nuclear programme as its human rights record, as well as Ahmadinejad’s denial of the Holocaust.

Demonstrations against the visit were staged in Brasilia and other major cities across the country.

Lucia Newman, Al Jazeera’s Latin America editor, said: “He [Lula] has faced criticism not only from the Republicans in Washington but also in Brazil itself.

“They [critics] believe he has gone too far; that he’s isolating Brazil by going to the side of countries that are considered by some to be, as we know, on the axis of evil.”

Lula defended the visit, saying any progress on the nuclear standoff with Iran and on the stalled Middle East peace process required dialogue with all parties involved.

Ahmadinejad’s trip follows visits in the past two weeks by Mahmoud Abbas, the Palestinian president, and Shimon Peres, his Israeli counterpart, who called on Lula to use Brazil’s influence to help curb Iran’s nuclear ambitions.

Iran’s nuclear programme, which it says is intended for civilian use, has drawn criticism from Western countries which suspect Tehran is seeking to build a nuclear bomb.

World powers have urged Iran to reconsider its rejection of a UN-drafted deal aimed at a peaceful resolution to its contested nuclear programme.

The deal would have seen Tehran shipping its low-grade enriched uranium to Russia and France where it could be processed to be used as fuel in Iran’s medical-purpose reactor.

Instead, Iran wants a direct swap of low-enriched uranium for processed nuclear fuel, taking place on Iranian soil.

Ahmadinejad’s visit comes as the military back home engages in large-scale war games centred on protecting Iran’s nuclear facilities from attack. The Iranian leader is set to visit allies in Bolivia and Venezuela next to shore up more South American support. Al Jazeera

It came complete with a dismissive sound bite – comparing Iran’s foes to a mosquito – a bit of boasting about Iran’s prestige and a touch of self-analysis. Iran’s president said Sunday that Tehran doesn’t trust the West to keep its promises.

Added together, it helps explain Iran’s zigzag reactions last week to a UN-drafted nuclear pact, and why Iran is in no hurry to cut a deal.

For days, Iran had hinted that it would back the essential element of the UN offer – to send about 70 percent of its low-enriched uranium stockpile out of the country – but wanted some changes to the formula.

Those changes turned out to be more like a full counter proposal.

The response Thursday – as described by diplomats – essentially seeks to keep the uranium in Iran. That could be an ultimate deal breaker, because the West wants to pare down Iran’s store of low-enriched uranium to a point where it cannot make a nuclear warhead – at least temporarily.

But no one is ready to call it quits yet. Washington and its allies are hoping Iran softens its position. On Monday, Iran’s Foreign Minister Manouchehr Mottaki told reporters in Malaysia that bargaining was still possible.

Asked if Tehran has rejected the deal, Mottaki said: “No.”

This may be welcome news in Western capitals. Yet many will see it as suspiciously like another stalling tactic.

Iran’s negotiations with the West have been a master class in slo-mo diplomacy. Since uranium enrichment was restarted three years ago, Iran has been able to draw out a showdown by offering just enough to the West when the heat became uncomfortable.

“Iran believes time is on their side for now,” said Mustafa Alani, a regional analyst at the Gulf Research Center in Dubai.

That is because there’s little in the UN plan that Iran likes and no serious domestic pressure for unpopular compromises. Standing firm, meanwhile, brings some immediate dividends.

Ahmadinejad and his hard-line allies can claim the high ground as defenders of Iran’s national dignity and strides in nuclear technology. It’s particularly tempting for Ahmadinejad, a rare opportunity to cross the political no man’s land after June’s disputed elections. Even his harshest opponents take pride in Iran’s nuclear accomplishments.

Ahmadinejad played this to full effect Sunday. In a posting on a government Web site, he was quoted as describing the nuclear negotiations as a match between Goliath Iran and an annoying insect.

“While enemies have used all their capacities … the Iranian nation is standing powerfully and (Iran’s foes) are like a mosquito,” he said.

He further scolded the West for what he called a history of broken promises. Iran, he said, “looks at the talks with no trust.”

The trust gap comes with a long back story. Before the 1979 Islamic Revolution, Iran says it made a deal with France for a 10 percent stake in a nuclear plant and was expected to receive 50 tons of UF-6 gas, which can be turned into enriched uranium. But Iran claims it never received even a gram.

To Iranian leaders, that’s just another example of perceived Western bullying, which also include sanctions and a lack of pressure on Israel to open itself to international nuclear scrutiny.

Israel is widely considered to have nuclear arms, but has never publicly disclosed details – and has left open the option of military action to block Iran from acquiring nuclear weapons.

In the current context, Iranian authorities also raise worries about Iran’s self-sufficiency or of being at the mercy of the West for reactor fuel. Those are powerful themes inside Iran – making it unlikely that Iranian leaders would stoke such anxieties and then agree to the UN package.

Iran insists its nuclear program is only for research and energy production and has reportedly floated a counterproposal: to enrich uranium to reactor-ready strength at home with monitoring by the UN’s nuclear watchdog group.

But Western leaders are not biting on Iran’s Plan B.

On Friday, the European Union expressed “grave concern” about Iran’s nuclear program and “persistent failure to meet its international obligations.” In Washington, the reaction has been more muted, but President Barack Obama does not favour open-ended talks.

Congress also could give the White House new sanctions leverage, this time to penalize foreign firms that sell and ship refined petroleum products to Iran. That is perhaps Iran’s most vulnerable point. Right now, it must already import about 40 percent of its gasoline and other fuel products.

But there’s no sign of panic from Tehran. The country has ridden out US and international sanctions for years and can look to its economic ties with China and Russia as major buffers.

For the moment, it appears Iran instead is banking on the gravitas of the groundbreaking talks that opened new channels with the United States.

The West may be reluctant to step away from a level of outreach that would be hard to recapture. Yet there is certainly an expiration date on Washington’s patience.

“The president’s time is not unlimited,” White House press secretary Robert Gibbs said Friday. Indian Express

State media reported that four members of the International Atomic Energy Agency visited the underground nuclear facility, which is being built into the side of a mountain near Qum, about 150 kilometres southwest of Tehran.

The United States, Britain, France, Germany, Russia and China demanded unfettered access to the facility after Iran disclosed its existence last month in a letter to IAEA.

At the time, Iranian President Mahmoud Ahmadinejad told the UN that the country did not keep its second enrichment facility secret and that Iran was working within the guidelines of the UN nuclear watchdog.

But he dodged a question about whether Iran had enough enriched uranium to make a nuclear weapon. Ahmadinejad claimed the rules required that the agency be informed of any new enrichment facility six months before it became operational.

The new facility wouldn’t be working for 18 months, he said.

But the IAEA said Iran was obliged to notify the agency when it begins designing such facilities. Uranium enrichment is a process that can be used to make fuel or nuclear weapons.

No results from Sunday’s inspection are expected until the team leaves the country. The four members from IAEA are expected to spend three days in Iran.

They are expected to compare Iran’s engineering plans with the actual layout of the plant, interview employees and take environmental samples to check for the presence of nuclear materials.

The small-scale site is meant to house no more than 3,000 centrifuges — much less than the estimated 8,000 machines at Iran’s other uranium conversion facility, Natanz, south of Tehran.

A recent satellite image provided by DigitalGlobe and GeoEye shows a well-fortified facility built into a mountain about 32 kilometres northeast of Qum, with ventilation shafts and a nearby surface-to-air missile site, according to defence consultancy IHS Jane’s, which did the analysis of the imagery. The image was taken in September. CBC News