In April of this year, Mohammed ElBaradei, the Director General of the International Atomic Energy Agency, went to Tehran. Dr. ElBaradei went to Tehran to convince Iran's leaders to cooperate with the IAEA, as the Islamic Republic is obligated, and to suspend activities of international concern, as the IAEA Board had required.

The activities of concern -- Iran's once-secret pursuit of uranium enrichment and plutonium production -- are not necessary for civil nuclear energy. They are, however, the two primary means for producing material for a nuclear weapon.

Iran's leaders did not listen to Dr. ElBaradei. They even postponed his visit, with cynical intent, so that Iran's President could announce in advance the first uranium enrichment.

This week the UN Secretary-General, Kofi Annan, went to Tehran. Like Dr. ElBaradei, Mr. Annan sought to convince Iran's leaders to cooperate with the IAEA and to suspend activities of international concern. This time, both cooperation and suspension were mandated by the UN Security Council under Resolution 1696 of July 31. Iran's leaders reacted much as they did five months ago.

By all reports, they did not listen to Kofi Annan. Defiant of world concerns, disrespectful of their international obligations, Iran's leaders offered no cooperation. Instead, they restated their resolve to ignore UN requirements.

This evening I would like to explain:

Why the course chosen by Iran's leadership is of concern to us all.

Why the time has come for the Security Council to back international diplomacy with international sanctions.

But first, let me review last week's report by Dr. ElBaradei.

Iran's Failure to Cooperate and Suspend Activities of Concern

Five days ago, on August 31, the Director General submitted his latest report on Iran's nuclear program. The report documents Iran's continued failure to cooperate with the IAEA.

In just over five pages, the Director General lists a dozen examples of Iran's failure to provide access to information, facilities, and individuals. Instead of granting IAEA requests for greater access, Iran has limited where inspectors can go and refused Agency requests to upgrade monitoring capabilities.

Instead of answering IAEA questions, Iran continued to stonewall.

· Iran has failed to explain apparent connections between undeclared uranium conversion activities and the design of a missile warhead, pointing to what the Director General has called a "military-nuclear dimension."

· Iran has failed to satisfy IAEA concerns about ties to the A.Q. Khan network, an illicit market for nuclear weapons technology.

· Iran has failed to meet the IAEA's request to turn over a document from the A.Q. Khan network on fabricating components for nuclear weapons. Instead, as we read in the report, Iranian authorities confiscated and destroyed IAEA inspector notes on the document's contents.

· Iran has failed to satisfy IAEA concerns about its work on advanced centrifuges.

According to the Director General's report, Iran has now acknowledged that it is researching and developing advanced centrifuges. But Iran's authorities have not offered access to this project, nor have they clarified its status and scope. This follows Iran's past failure first to admit, and then to explain, their procurement of advanced centrifuge technology and blueprints from the A.Q. Kahn network.

This is yet another reason why the Director General cannot verify the peaceful nature of Iran's nuclear program.

The Director General's report also documents Iran's failure to implement the Security Council's mandatory suspensions. At Natanz, Iran continues to operate its first cascade of 164 centrifuges for uranium enrichment. On August 24, just one week before the UN deadline, Iran resumed feeding uranium hexafluoride into this cascade. According to the Director General's report, installation is proceeding for a second cascade of 164 centrifuges, which Iran intends to start operating later this month.

The report also reveals that Iran has begun a second campaign of uranium conversion at Esfahan, producing uranium hexafluoride to feed into the cascades at Natanz. When this campaign is completed in January, Iran plans to have produced nearly 140 metric tons of uranium hexafluoride. According to estimates by the International Institute for Strategic Studies, this is enough, if successfully enriched, to provide material for sixteen nuclear weapons.

The Threat Posed by Iran's Nuclear Ambitions

After three years of intensive verification, Dr. ElBaradei can still not certify the peaceful nature of Iran's nuclear program. Indeed, Iran's nuclear activities are not consistent with a program that is peaceful, and more and more countries are convinced it is not.

More and more governments have come to the same conclusion as my own: That Iran's nuclear program -- with its history of secrecy and violations, its ties to the A.Q. Kahn network, its connections to Iran's military -- is actually a cover for developing nuclear weapons. The pursuit of nuclear weapons by the dangerous leaders in Tehran threatens Iran's neighbors and threatens the wider world community.

Iran's leaders are already the world's most active sponsors of terror.

· Iran is a principal founder and supporter of Hezbollah, the terrorist group that launched missiles on Israel from an illegal sanctuary in Lebanon.

· Iran has provided Hezbollah with funding, safe haven, training, and weapons.

· Iran's leaders have publicly encouraged Hezbollah's violence and attacks.

Iran's leaders violently oppose Middle East peace.

· Countries across the world support a peaceful solution to the Arab-Israeli dispute.

· Iran is the only country whose leadership opposes this vision for lasting peace.

· Only Iran has called for Israel to be wiped off the map. Iran's leaders support violence elsewhere in the region.

· In Iraq, they have provided weapons and training to Shia militia.

· Sophisticated bomb-making material from Iran has been found in Iraq in road-side explosives that have killed Iraqi civilians and coalition forces.

Imagine those same leaders, dangerous and defiant, armed with nuclear weapons.

· A nuclear-armed Iran could embolden its leaders to advance their ambitions across the Middle East, whether with the military forces they are building or the terrorists they train and equip.

· A nuclear-armed Iran could pose an even greater threat to Middle East peace, including the very existence of Israel.

· A nuclear-armed Iran could cause neighboring countries to re-evaluate their nonproliferation commitments.

This could spark a nuclear arms race in one of the world's most volatile regions. This could destroy the Nuclear Non-Proliferation Treaty, a cornerstone of international peace and security. Iran's actions pose a threat to international peace and security. This is why the Security Council adopted Resolution 1696.

Iran is not just another signatory of the NPT. It has violated its commitments, it has hidden its activities, and it is now subject to a Security Council Chapter VII resolution. Because of its behavior, Iran is a special case, one that deserves special verification and special measures.

Backing Diplomacy with International Sanctions

Our goal is to secure a diplomatic solution, one in which the leaders in Tehran give up their pursuit of nuclear weapons and fully meet their international obligations. With that goal in mind, we have worked with Europe, Russia, China, and other like-minded countries to present Iran's leaders with a clear choice. The negative choice is for Iran's leaders to maintain their present course, ignoring international concerns and their international obligations.

Our goal is to secure a diplomatic solution, one in which the leaders in Tehran give up their pursuit of nuclear weapons and fully meet their international obligations. With that goal in mind, we have worked with Europe, Russia, China, and other like-minded countries to present Iran's leaders with a clear choice.The negative choice is for Iran's leaders to maintain their present course, ignoring international concerns and their international obligations.

The positive choice, the constructive choice, the choice that would most benefit the Iranian people, is for Iran's leaders to cooperate with the international community and to take credible steps to assure the world that their nuclear program is solely peaceful. This must start by Iran meeting IAEA and Security Council requirements to suspend all activities related to uranium enrichment and plutonium production.

The IAEA required these suspensions as voluntary confidence-building measures. The Security Council, in Resolution 1696, has gone one step further, making the suspensions mandatory under Chapter VII of the UN Charter.

Iran suspending these activities would allow the Security Council to suspend further action. And Iran suspending these activities would allow negotiations to proceed on a long-term agreement. To provide the basis for an agreement, six Foreign Ministers from Europe, Russia, China, and the United States endorsed a package of incentives on June 1. The package offers substantial economic, political, and technological opportunities for the Islamic Republic. In the nuclear field, these include:

· reaffirmation of Iran's right to nuclear energy in conformity with its NPT obligations;

· willingness by EURATOM, the European nuclear agency, to conclude a nuclear cooperation agreement with Iran;

· active support for building new light-water power reactors, using state-of-the-art technology; and

· legally-binding assurances of fuel supply for any future Iranian nuclear reactors.

The package also opens the prospect for political dialogue and economic cooperation beyond the nuclear field. This includes:

· dialogue and cooperation on regional security;

· improved access to the international economy;

· cooperation on civil aviation and telecommunications.

The six Foreign Ministers made clear that negotiations on this offer were predicated on Iran suspending activities of concern. The UN Security Council endorsed the offer and made suspension, not only a prerequisite, but also an international requirement. By choosing not to suspend, Iran's leaders are making the negative choice: a course of confrontation over one of negotiation.

The world has warned Iran's leaders, repeatedly and clearly, that this course will bring not reward, but isolation and sanction. Iran's leaders have already subjected their country to international isolation.

· Iran was isolated in February, when the IAEA Board reported Iran's nuclear program to the Security Council.

· Iran was isolated in July, when the UN Security Council adopted Resolution 1696 mandating suspension.

Both were surprises and setbacks for Iran's leaders. But neither has succeeded in convincing them to change course. We cannot allow Iran's leaders to treat negotiations as a way to ignore international obligations. Resolution 1696 anticipated this contingency. It expressed the Security Council's intention, in the event of Iran's noncompliance, to adopt appropriate measures under Article 41 of Chapter VII to "persuade Iran to comply with the resolution and the requirements of the IAEA." Article 41 means non-military sanctions.

The failure of Iran's leaders to meet their international commitments -- as documented by the IAEA Director General and reflected in their rebuff of the UN Secretary-General -- means that the time has now come for international diplomacy to be backed by international sanctions.

Sanctions that can be applied in a graduated fashion. Sanctions that target Iran's weapons programs and those who guide and support them. Sanctions are not the end of diplomacy. They are an integral part of diplomacy. They will help Iran's leaders understand that international obligations are to be treated seriously -- not like the notes of IAEA inspectors that they confiscate and destroy.

Iran's leaders must understand that their choices have consequences and that their best choice remains a course of cooperation and negotiation.

Making Diplomacy Succeed

Iran's leaders are determined and defiant.

We have known for some time that diplomacy, to be successful, must be resolute and sustained.

We have known for some time that diplomacy, to be successful, must be backed by a full range of international measures.

Now, to be successful, international diplomacy must be backed by international sanctions.