TEHRAN, 26 June 2006 — Iran yesterday again brandished oil as a weapon in a dispute over its nuclear program, with Tehran continuing to resist international demands to freeze sensitive uranium enrichment work.

The threat came amid mounting pressure on Tehran to accept a proposal that it halt enrichment, at the center of fears it could acquire nuclear weapons, in exchange for multilateral talks and a package of incentives.

“If the country’s interests are attacked, we will use all our capabilities, and oil is one of them,” Iranian Oil Minister Kazem Vaziri-Hamaneh was quoted as saying by state television.

“The world needs energy and understands the effect on the market of oil sanctions against Iran, and no one will make such an unreasonable decision,” the minister said, predicting sanctions against Iran could push crude up to $100 a barrel.

Tehran has been asked to reply to the proposal — drawn up by Britain, China, France, Germany, Russia and the United States — by the end of the month, although President Mahmoud Ahmadinejad said it would take until Aug. 22 to give a formal answer.

But Iran appears to still reject the key condition in the package — a full and verified suspension of uranium enrichment — and continues to call for negotiations devoid of any “preconditions.”

“The suspension of enrichment is one step backward. We think Europe should negotiate without preconditions... which only cloud the negotiating atmosphere,” Foreign Ministry spokesman Hamid Reza Asefi told reporters.

“Instead of setting preconditions that are both unreasonable and baseless, we should negotiate,” he added.

Turkish Foreign Minister Abdullah Gul also arrived in Tehran on Saturday evening, carrying “a message from the Turkish Prime Minister Recep Tayyip Erdogan to the Iranian President” — clearly an appeal for Iran to compromise. “As a neighboring country (to Iran) we are trying to find a peaceful solution, since it is in the interest of the two countries, the region and the world,” Gul told reporters.

“We believe that with composure we can get results, and we know that Iran is studying the proposal with composure,” he added.

Meanwhile, the United States remains convinced Iran should not be allowed to do any uranium enrichment work, after asking the UN nuclear agency for a technical assessment, diplomats said commenting on a confidential agency document obtained by AFP.

The one-and-half page unofficial text supplied by International Atomic Energy Agency chief Mohamed El-Baradei gives the IAEA’s assessment that even reduced enrichment work would help Iran move toward “successful long-term sustained centrifuge operation,” which is needed to make enriched uranium that can be used for nuclear power reactor fuel or nuclear bomb material.