Iraq may have hogged the headlines at this month's United Nations General Assembly and in Washington, but behind the scenes there was more talk about a looming crisis over Iran's nuclear programme.

Once the US Presidential election is over in November, the Atlantic alliance faces its next major test over how to handle Teheran's quest for nuclear technology, which Washington says is intended to give it an atom bomb.

Iran was the dominant topic of US Secretary of State Colin Powell's closed-door meetings in New York with foreign ministers of the European Union and the Group of Eight major industrial powers, participants said.

"The Iranians need to be clear that they can't drive wedges between Europe and the United States," said EU External Relations Commissioner Chris Patten, who attended both sessions.

"We don't accept that they should retain the option to move from civilian nuclear use to military use and we want an absolutely clear commitment to focus on civilian use with proper verification," he said in an interview.

'Frustrating'

Britain, France and Germany launched an initiative last year to engage Iran in a dialogue, offering co-operation on peaceful nuclear energy and closer economic ties if Teheran renounced all activities that could give it a weapon-making capability, including enriching nuclear fuel.

All three countries are now disenchanted at the absence of full, transparent co-operation with the UN nuclear watchdog and alarmed by Iran's announcement last week that it had begun processing raw uranium for enrichment.

"What's frustrating is that we've worked very hard - Germany, France and ourselves - to secure a way out of this situation," said British Foreign Secretary Jack Straw. "I hope that even at this late stage, they will see the wisdom of taking our advice."

A power struggle in which Islamic hard-liners have gained the upper hand over reformists in Teheran may also have dimmed prospects of a deal, diplomats say.

French Foreign Minister Michel Barnier said the Europeans were growing impatient, and if they were not satisfied soon Iran would be reported to the UN Security Council - where it could face sanctions.

European diplomats express concern privately about growing hints that Israel may be preparing a military strike against Iran's nuclear installations, as it did against an Iraqi reactor in 1981.

The Europeans are hoping Washington will finally be willing to offer Iran carrots as well as sticks after the US election to give their own initiative greater weight.

"It is difficult to expect innovations from any US administration in the weeks before an election ... but if we are to prevent the emergence of a potential nuclear power in the Middle East, we are all going to have to ... offer a pretty convincing package to the Iranians," Patten said.

Yet if Bush is re-elected, administration hard-liners have made clear they will oppose such a strategic "grand bargain" with Teheran.

Straw, EU foreign policy chief Javier Solana and several European ministers met Iranian Foreign Minister Kamal Kharrazi on the sidelines of the UN session and warned Teheran that time is running out for it to halt all enrichment activities or be brought before the Security Council.

A last-minute suspension on the eve of the next board meeting of the International Atomic Energy Agency on November 25 would not be enough on its own, diplomats said.

John Bolton, the US under secretary of state for arms control and international security, regarded as a leading hawk, worked the UN corridors, telling Europeans and other IAEA board members the time has come to get tough on Iran.

'Parking ticket'

But while Teheran is working frantically to avoid being taken to the Security Council, many diplomats doubt whether the UN body would agree on significant sanctions in the absence of more compelling evidence of Iranian violations.

One senior EU official said Iran's formal breaches of the nuclear Non-Proliferation Treaty warrant "a parking ticket" rather than major-league sanctions, since uranium enrichment is permitted by the 1970 pact to halt the spread of nuclear arms.

"In terms of the treaty, their only offense was to conceal the scope of their programme and some of their facilities to the IAEA in the past," the official said.

The US failure to find any weapons of mass destruction in Iraq after the war to oust Saddam Hussein that was launched over that issue has made governments skeptical of purported secret intelligence.

On the other hand, the prospect of Iran's Islamic rulers getting their fingers on a nuclear trigger is as alarming to European leaders as it is to the US and Israel.

(Agencies via Xinhua)