TEHRAN, 6 March 2005 — Iran said yesterday it would return to making nuclear fuel and that the Middle East would become even more unstable if the Islamic Republic was sent to the UN Security Council over its atomic program. US officials said on Friday they were still looking to haul Iran before the council for possible sanctions, but have not yet been assured of EU backing for this move should European attempts to broker an atomic deal fail.

Washington argues that Tehran is making fuel for atomic warheads. Iran insists it intends to use enriched uranium only in power stations. “If the Americans succeed in referring Iran’s case to the Security Council, Iran will immediately suspend all its voluntary confidence-building measures,” Iran’s chief nuclear negotiator Hassan Rohani told a conference.

Iran agreed last year to suspend making nuclear fuel for a few months while it held talks with Britain, France and Germany. The EU states are encouraging Iran to drop its fuel program in return for economic incentives. “Parliamentarians may even come up with a harder decision,” Rohani added.

He warned the United States and Europe of the danger of an oil crisis, but said that a deal with Europe could be near. “The first to suffer will be Europe and the United States themselves, this would cause problems for the regional energy market, for the European economy and even more so for the United States,” Rohani, told reporters.

Rohani, however, expressed optimism that an agreement would be reached with Europe over the development of Iran’s nuclear program. “If US pressure doesn’t prevent it, I think we will manage to reach an agreement with the Europeans because they don’t want to deprive the Iranian people of their right and will try to act fairly,” Rohani said.

Many conservative parliamentarians have called for Iran to pull out of the nuclear Non-Proliferation Treaty. In the shorter term they have threatened that Iran will not ratify the Additional Protocol to the NPT, which permits snap UN inspections of nuclear sites.

“The security and stability of the region would become a problem,” said the mid-ranking cleric who is secretary-general of Iran’s Supreme National Security Council. “This would be a particular problem for the United States because it has a lot of troops and equipment in region and is in fact our imposed neighbor.”

Iran often complains that it feels besieged by the United States, which has troops in Iraq and Afghanistan and has conducted military exercises in the Caspian Sea. But Rohani still held out hope that talks with Europeans could pay dividends, saying Iran had given the Europeans “an objective guarantee” that it was not seeking arms.

“The ball is in the Europeans’ court right now,” he said, adding Iran would make the terms of its guarantee public if the European rejected it. He said any European position asking for an end to the fuel cycle — enriching uranium to make nuclear fuel — as an objective guarantee, was unacceptable.

“My feeling is that Berlin and Paris have accepted the middle of the road approach,” he continued. Iran-EU talks continue in Geneva next week.

Rohani warned the US that it could destabilize the region if it blocks an accord with Europe. If Washington brings the issue before the Security Council, “Iran will retract all the decisions it has made and the confidence-building measures it has taken.” He said Iran’s leaders “could be called upon to make new decisions”, but did not provide any details on what that would involve. “The stability in the region would become fragile and the United States would be the first to suffer,” he said.

Rohani insisted that the construction of a heavy water reactor in Iran was only for research purposes and would not be used to produce plutonium for a nuclear bomb.