West hits out at Iran over ban on atom inspectors

VIENNA (Reuters) - Western powers accused Iran on Wednesday of trying to intimidate the U.N. atomic agency by barring some nuclear inspectors and the United States warned the Islamic state of possible diplomatic consequences.

Iranian envoy Ali Asghar Soltanieh hit back during a tense meeting of the board of the International Atomic Energy Agency, saying during a heated outburst that IAEA chief Yukiya Amano had "completely missed the facts," diplomats said.

Iranian President Mahmoud Ahmadinejad "flatly rejected" the IAEA demand to let its inspectors back into Iran, NBC News said, citing an interview with him. "He said he would simply not let that happen," NBC reported.

Ahmadinejad denied Iran was being uncooperative and said the IAEA should instead focus its attention on Israel, which he referred to as an illegal "Zionist regime," NBC reported.

The escalating dispute has further worsened ties between Iran and the IAEA and deepened concern about Iran's nuclear work, which the West suspects is aimed at developing atomic weapons.

"Relations between Iran and the IAEA are the lowest they've ever been," said one Western diplomat who attended the closed-door session. "Soltanieh was shouting," said another, adding Amano had responded calmly to the criticism against him.

In comments that angered Tehran, Amano told the board earlier this week that Iran's refusal to admit some experienced inspectors was hampering the agency's work.

Iran, which says its nuclear program is aimed at generating electricity, has said two inspectors it banned in June had provided false information about its activities.

It says it is within its rights to refuse inspectors under its non-proliferation accord with the U.N. body and the agency has a pool of more than 150 other experts it can use.

Glyn Davies, U.S. envoy to the IAEA, said Iran was making a "clear effort" to intimidate inspectors and influence them.

"It is unprecedented for a state to reject inspectors because they report accurately ... what they see and hear."

DIPLOMATIC ACTION?

In a separate statement, France, Germany and Britain voiced concern about what they called Iran's growing failure to work with the IAEA, saying that was "troubling and reprehensible."

Besides those barred in June, Tehran cancelled access for a senior Middle East inspector in 2006 and has objected to several other designated inspectors in the past.

If Iran continues to refuse inspectors, it could face diplomatic consequences at the IAEA, whose governors referred Iran's dossier to the U.N. Security Council in 2006 over its nuclear secrecy and lack of full cooperation.

Davies referred to language in the IAEA's agreements with member states governing inspections, which he said "indicates that the board should consider 'appropriate action' when inspections are being impeded" by the rejection of inspectors.

Relations between Iran and the IAEA have deteriorated since Amano took over in December. He has taken a firmer approach than his predecessor, Mohamed ElBaradei, saying in his reports that Tehran could be trying to develop a nuclear-armed missile.

Iran has accused Amano, a veteran Japanese diplomat, of issuing misleading and politicized reports.

Amano's latest report to the board showed Iran was pushing ahead with its nuclear work despite tougher sanctions imposed by the United Nations, the United States and European Union.

It expressed growing frustration over what the IAEA sees as Iran's failure to respond to concerns about possible military dimensions to its activities.

The EU trio said Iran seemed "determined to pursue a nuclear program which could provide it with military capabilities."

Soltanieh said Iran would take legal action to seek compensation for "huge damages to my country as a result of continuous baseless allegations" over its atomic work. He also called on Amano to report on Japan's nuclear material stockpile.

(Additional reporting by JoAnne Allen in Washington, Editing by Charles Dick and Peter Cooney)