Reuters: The Bush administration, in a major shift, will adopt a European proposal to offer Iran economic incentives to abandon its nuclear ambitions, U.S. and European officials say. The United States is expected to allow Iran to join the World Trade Organisation and buy aircraft spare parts and, in return, Britain, France and Germany have agreed to refer Iran to the U.N. Security Council if it fails to give up its suspected nuclear weapons program, the officials said. Reuters

By Arshad Mohammed and Carol Giacomo

WASHINGTON - The Bush administration, in a major shift, will adopt a European proposal to offer Iran economic incentives to abandon its nuclear ambitions, U.S. and European officials say.

The United States is expected to allow Iran to join the World Trade Organisation and buy aircraft spare parts and, in return, Britain, France and Germany have agreed to refer Iran to the U.N. Security Council if it fails to give up its suspected nuclear weapons program, the officials said.

The united U.S.-European approach, expected to be announced in coordinated, separate statements on Friday, would mark an important milestone in efforts to curb what Washington believes is Iran's attempts to develop nuclear arms.

A U.S. decision to embrace economic incentives is a significant reversal from Washington's previous refusal to reward Iran for what it regards as bad behaviour.

The Europeans, in turn, would shift gears by pledging that if their negotiations with Iran collapse or if Tehran reneges on a promise to suspend nuclear enrichment activities, they will join Washington in bringing the issue to the U.N. Security Council, which could impose sanctions.

Secretary of State Condoleezza Rice told reporters U.S. and European views on dealing with Iran's nuclear program were converging. Later, authoritative sources said a common position would come on Friday.

"We talked through in great detail the Iran issue with the Europeans. They are very firm how to ensure Iran's compliance, so we're preparing to take some steps to support them," one U.S. official told Reuters.

Another U.S. official added: "The Europeans are ready to make sure Iran meets her obligations and to look at what next steps to take."

"We are really coming to a common view of how to proceed," Rice told reporters during a trip to Mexico when asked about European diplomatic efforts to resolve the matter. "We are making a lot of progress and will come to conclusion on that fairly soon."

U.S. SKEPTICAL DIPLOMACY WILL SUCCEED

The United States accuses Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran denies this, saying its nuclear program is for peaceful power generation.

Washington can effectively block Tehran from joining the WTO and from importing aircraft parts with substantial U.S. content, making U.S. support vital if Iran is to get either benefit.

While deeply sceptical the European diplomacy will work, U.S. officials have said they want to give it the best chance of success and to insulate themselves from blame if it fails.

"I want to be very clear that this is really not an issue of what people should be giving to Iran. This is an issue ... of keeping the spotlight on Iran, which ought to be living up to its international obligations," Rice said.

Some U.S. officials had indicated they wanted specific commitments from the Europeans to bring the Iran issue to the Security Council in June or another specific date and to support sanctions once the council took up the matter.

But one U.S. official told Reuters: "There's not a lot of detail, not a lot of specificity" on these points.

He said the European statement was expected to generally reaffirm verbal commitments by European officials to join the United States in bringing Iran to the Security Council but would not specifically define what constitutes a breakdown in negotiations.

"If you have a commitment in principle, that's pretty good," the U.S. official said.

U.S. and European officials said that while they discussed such issues as deadlines and sanctions, the administration in the end did not insist on specific EU commitments on these points. The EU statement is not expected to mention sanctions directly, officials and diplomats said.

A European diplomat said the EU view is that "we go (to the Security Council) if Iran breaks its commitments," including if some new revelation about covert nuclear facilities or activities is uncovered.