Iran nuclear program faces setback from Russian reactor delay

A portion of Iran's nuclear program – a $1 billion reactor being built by Russia at Bushehr – hit a snag on Monday with Moscow announcing that construction will be delayed beyond the end of this year.

As a new report from the UN nuclear watchdog calls on Iran to guarantee no more hidden nuclear sites, Russia announced that the oft-delayed $1 billion reactor Moscow is building at Bushehr will not begin operations this year, as earlier promised.

Russia insisted the delay is technical and not motivated by political concerns.

Russian President Dmitri Medvedev met his American counterpart Barack Obama on the sidelines of an Asia-Pacific summit in Singapore on Sunday, expressing mutual frustration at Iran's apparent pullback from a nuclear deal that Iran agreed to in principle last month.

Under the deal, Iran would export 70 percent of its current stockpile of low-enriched uranium (LEU) – enough to make at least one bomb, if enriched to a much higher level – in exchange for nuclear fuel for a small reactor in Tehran that produces medical isotopes.

"Unfortunately, so far at least, Iran has been unable to say yes to what everyone acknowledges is a creative and constructive approach," President Barack Obama said after speaking with Mr. Medvedev. "We are now running out of time with respect to that approach."

(Read more about the IAEA report here, including what IAEA inspectors found at a second enrichment site recently declared by Iran.)

Strains in Russia-Iran ties

Russia and China, two of the five permanent members of the United Nations Security Council, have been reluctant to back further sanctions on Iran. China has extensive business deals and is the largest trading partner with the Islamic Republic. But Russian-Iranian ties are being tested. Moscow is concerned about Iran's nuclear ambitions and the Iranians are concerned over big business deals with Russia that have been subject to political delays.

Medvedev said Russia was "not completely happy about the pace" of Iran's moves to solve the nuclear impasse and suggested that more sanctions were possible. "In case we fail, the other options remain on the table, in order to move the process in a different direction," he said.

Obama said the deal offered to Iran was "fair." Iran would ship out a large portion of its own LEU stocks, where Russia would enrich them to the 20 percent level required for the medical needs, then France would fabricate the fuel rods for the medical reactor.

But Iran has given an array of responses, from suggesting the deal was off, to proposing piecemeal deliveries, to wanting to cut out France, to wanting to start negotiations again from scratch.

In his last weeks on the job, Nobel Peace Laureate and IAEA Director General Mohamed ElBaradei has been looking for a compromise deal that might include putting Iran's nuclear material first in a country trusted by Iran, such as Turkey.

Russia says Bushehr delay technical

Iran has sometimes accused Russia of deliberately delaying progress on the Bushehr plant, as political concerns grow in the West about whether Iran's civilian power effort masks a weapons program.

Moscow denied that the delay was a political decision. Sealed consignments of nuclear fuel began arriving from Russia to Iran in 2007. "The engineers have to reach their findings," said Energy Minister Sergei Shmatko on Monday. "The building of the Bushehr station is defined absolutely 100 percent by technological conditions."

UN nuclear watchdog: Can't rule out other Iran enrichment sites