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CHAIRMAN: The next issue is the nuclear topic in Iran. I would say that in the last one and a half years we have received both good news and bad news. The bad news is that a year and a half ago, we suddenly found out that Iran is much closer to obtaining nuclear weapons than we had thought, mainly through uranium enrichment. The good news is that the Iranian plan was uncovered. International pressure on Iran in this context has increased as never before. How will the balance be in the future? Will the good news prevail? Or the bad? Ephraim will tell us.

DR. EPHRAIM ASCULAI: Thank you very much. Good afternoon. I too would like to congratulate Ephraim Kam on the publication of his book. It is an important book and -- as far as I have managed to read -- both very enjoyable and very important. I know how much work Ephraim put into writing it. And he did it with great thoroughness and detail, which is so important in such important, technical things. Once again, I congratulate him. Second, I had a feeling that not everyone sitting in this room would be nuclear scientists, or even understand the terminology. Therefore I took the liberty of preparing several main concepts in order to clear things up. Fissile material are the substances from which nuclear weapons are produced. The core of the nuclear bomb is made from fissile material. There are several such substances, the most commonly known of which are plutonium and enriched uranium. Enriched uranium means uranium which is composed of much more uranium 2-3-5 than the regular uranium which has only 0.7%. Plutonium is derived as a result of radiating uranium in reactors. After this, one must take the fuel in the reactors, separate it via a chemical reaction, derive the plutonium from it. In this process there is also radioactive waste - these are the fissile byproducts which are very radioactive, one has to get rid of them. Enriched uranium can be derived from natural uranium through a variety of methods. Many use the method of gas centrifugation, there is also the method of gas diffusion -- there are many processes. Iraq, for example, tried many processes - lucky for us, they didn't manage to complete them. Heavy water is water rich with heavy hydrogen. Heavy water is used in reactors - these reactors use natural uranium -- the same uranium which consists of only 0.7% uranium 235 -- and plutonium can be derived via this heavy water with considerable efficiency. Uranium is metal. Metallic uranium is uranium in the form of metal which can be used - and is used - in nuclear weapons. Power reactors are reactors which are much bigger than research reactors, for example, and electricity is derived from them. There are many nuclear power stations worldwide, and there are several countries whose main electricity energy is derived from nuclear reactors. The International Atomic Energy Agency -- which is shortened to IAEA -- performs verification in states which signed verification agreements in order to ensure these states obey the instructions of the Treaty on the Non-proliferation of Nuclear Weapons. This verification wasn't good. The original verification agreements weren't good. And as a result of the understanding that they weren't good -- an understanding which resulted from the Iraq War -- they developed the Additional Protocol, which strengthens the existing verification agreements to a great extent. This Protocol is still not perfect, however. One of the minuses of this Protocol is the fact that it pretends to enable the IAEA to declare that certain countries do not have nuclear substances or forbidden activity. Philosophically, this is somewhat problematic. Let's move to what happened in Iran.

During the reign of the Shah, he decided on a rather pretentious nuclear strategy of six large power reactors. And he started constructing them. At the time of the downfall of the Shah in 1979, several reactors were being constructed, two of which were more developed than others in a place called Bushehr. They were built by a German company (inaudible), and they weren't perfect. During the Iraq-Iran war, Iraq attacked these reactors several times. Although they didn't manage to cause them any serious damage, the construction of these reactors was halted. After Iran declared -- or decided -- that nuclear (power) was not only negative but also had some positive aspects, Iran decided to continue with the construction of the nuclear reactors. They contacted several German companies (inaudible), but these didn't agree to continue constructing the reactors. Only Russia agreed to do so. At present, the reactor is in its most final stages of construction. Its first activation is expected to be in the beginning of 2005. There is one problem.

If you remember, I said that plutonium is produced in the fuel of reactors. This is true also in power reactors. Indeed Russia insists that after the fuel is used in the reactors, it will be returned to Russia in order to ensure that Iran won't have the potential to derive plutonium from it. Now, although Iran claims that everything is okay, Iran won't sign an agreement to return the radiated fuel to Russia. Apparently this is currently delaying the process. With this slide, I would like to assemble -- afterwards I'll present them more in detail -- the main problems which Iran is facing -- or to be exact the main problems that the world has with Iran. Iran did not report to the IAEA -- as it should have -- the fact that it had purchased uranium compounds such as natural uranium and somewhat enriched uranium. It did not report this -- which is forbidden. Now, there were people, such as the general manager of the IAEA, who said this is merely a technical transgression. It is not nice. But it's not terrible. Later on it was discovered that Iran had not declared on uranium enrichment activities. This is not much more terrible than purchasing uranium compounds. But in addition to these two things -- both of which constitute a deviation from the written agreements -- we also witness a recurring phenomenon of Iran lying, Iran concealing, Iran not reporting to the IAEA on things it should have. Perhaps this is a way of blackmailing the world -- Iran trying to obtain something from the world, in return for some 'bonuses' it will give to the inspection system. What was discovered in Iran?

In the summer of 2002, a group of Iranian expatriates in Washington announced that they had discovered two very significant facilities in Iran which are linked to the plan of developing nuclear weapons. One of these facilities was a facility for uranium enrichment in a place called Natanz. And the other one was a facility for producing heavy water in a place called Arak. From analysis of this data it emerged that the uncovered enrichment plan constituted a very significant danger. The danger I am talking about is of course the danger in the potential of deriving nuclear weapons. From this date in August considerable pressure was beginning to be applied -- first on the IAEA, the International Atomic Energy Agency, which in turn started applying pressure on Iran to allow it to visit these discovered facilities. First Iran said yes. Then it delayed, and delayed and delayed until February of the following year when the visit took place. This is a map of Iran, the Gulf, the Caspian Sea, Tehran, Isfehan, the reactor in Bushehr. In Tehran and in Isfehan there are nuclear centers here are Arak and Natanz. And here there are uranium mines. In other words, there are many facilities. And they have the potential to derive the uranium by themselves. What did the inspectors learn? What was discovered by the visits of the IAEA? At the visit in Natanz, they showed the visitors and the inspectors -- headed by the general manager of the IAEA -- a small experimental facility of 200 centrifuges which was in operation. In addition, they showed them components of about 1000 additional centrifuges. What also happened there? The IAEA took samples.

Taking samples is not a very complex matter. One merely takes a clean sheet of paper, removes some dust from the equipment and surroundings, and takes it for analysis. In this case, it was taken to analysts in Vienna. And enriched uranium was discovered in these samples -- in contrast to Iran's claim that they hadn't enriched or done anything wrong. In other words -- and here I come back to the lies -- Iran lies. Afterwards it makes amendments. But at first it lies. Now, these samples showed that Iran had enriched uranium. Or what we can say for sure is that the equipment had handled highly enriched Uranium. A high level, we must bear in mind, is a level suitable for nuclear weapons. For power reactors, only a low level of enrichment is necessary of 5%, 3% or 2%, whereas in this case enriched uranium was discovered at a high level. If I'm not mistaken, according to news reports they reached a level of 56% enrichment, which is a considerable enrichment and already very near to the high military enrichment, the level of which is around 90%. Furthermore, it was discovered that not only at the facility in Natanz was Iran active in enrichment. It somehow reached the knowledge of the IAEA that there was yet another facility in which they were active in uranium enrichment, namely in a facility known as Kama Electric, an electrical industrial plant. After some time and after pressure was applied -- and probably after Iran had decided that it had cleaned the Kama Electric facility well enough -- they permitted the inspectors of the IAEA to visit the site. They took samples. And lo and behold, there too highly enriched uranium was discovered. Now, the Iranians tried to pull themselves out of this by saying that the remains of highly enriched uranium were discovered due to the fact that the equipment had been brought from a different country which had been enriching uranium, whereas they themselves had not had anything to do with enrichment. At the same time, however, they claimed that the whole expertise was theirs, that they hadn't bought expertise from any other country. How did the world live with this contradiction? Well, the fact is it did. Let us move to a satellite picture. One such picture can demonstrate what we are seeing more than a thousand words. We see two main parts. The first -- it's a bit difficult for me to see from this angle, but I think I'm pointing at it -- two very large, underground structures. Very large. In other words, the area of each of these facilities is 30 dunams. We see a supervision facility between the two facilities -- I'm sorry, I beg your pardon. Here is facility number one. Here is facility number two. And between them a smaller facility. The area of each such underground facility is 30 dunams, whereas this -- probably the supervision facility -- is a bit less than 10 dunams. For an underground facility, this is an enormous area. Here we also see an entrance, an entrance for trucks. This entrance is rounded, probably in order to protect the entrance from a direct attack, or from an attempt to drop a bomb from an airplane. These structures are underground, and are covered by a very thick layer of earth which according to newspaper sources is several meters. In other words, we are talking about structures that are protected almost perfectly.

What do these structures do?

According to expert assessments that have been published, these structures with their large area hardly manage to refuel the sole power reactor in Bushehr. According to other calculations, if one wants to operate the same facilities with the same equipment in order to produce highly enriched Uranium, one can produce enriched Uranium for dozens of nuclear bombs annually. This is the potential of the facility which was discovered only in the summer of 2002. We don't know if intelligence apparatuses had been aware of it or not. But a group of organizations flooded this issue, and caused the IAEA to start performing inspections. But this is not everything that's been discovered. At the visit in Arak, they were asked what they needed heavy water for. They said that they were planning to construct a reactor of heavy water, natural uranium -- a reactor for research purposes in order to produce isotopes for medicine and agriculture. Such a reactor of 40 Mega-watts has the potential to produce 10 kilo plutonium -- or between one and two bombs per year. They also said that they had carried out experiments with deriving metallic uranium. Metallic uranium -- remember -- can be used both for bombs and for reactors, and is an important element for someone trying to create a nuclear bomb. The Iranians also finally admitted that they had purchased uranium compounds without declaring it to the IAEA, as I said before. What do the Iranians say of this whole story?

They need the reactor in Bushehr -- as they have claimed for many years -- to produce electricity. This electricity, produced via nuclear energy will save them lots of crude oil and natural gas which they will be able to store. At such future time as it becomes very expensive, they will be able to use it. As to the enrichment plant, they claimed -- as I've said -- that it produces fuel for the reactor. As to the reactor in Arak, they claimed that it serves to produce isotopes. But here I must point out several things. The energy produced by the reactor is extremely expensive. It has no economic justification. The self-production of the fuel at the facility which they are now constructing makes the whole deal even more expensive, and again has no economic justification whatsoever. And as I said, the plant in Natanz will hardly cover the quantity of Uranium required for regular refueling of the reactor. The isotopes can be bought at the open market. They are quite inexpensive and available for everyone, even for Iran at which the whole world is mad, because they're used for medical and agricultural purposes. There is no problem. And they have no use for a reactor for the purpose of research. To summarize this part of my lecture, there is no doubt that the entire nuclear strategy is aimed at producing nuclear weapons. Almost from the start, the US demanded that this issue of the Iranian violations of its agreements be passed to the Security Council. The Governors Council of the IAEA decided to set an ultimatum. This ultimatum demanded that Iran immediately suspend its enrichment activities, sign the Additional Protocol, and report on all the activities it had undertaken in the nuclear field. The ultimatum was to expire on October 31. And if you remember, towards the end of October, the foreign ministers of England, Germany and France went to Iran and more or less forced them to accept an agreement according to which they would submit to the ultimatum. What did the Iranians say?

The Iranians said that they would consent to the ultimatum, but with several exceptions. For one, that the IAEA would not (allow) a resolution denouncing them. Second, that the Middle East be disarmed of weapons for massive destruction. And third -- which is important, like all Iranian moves -- that Iran will be free to receive nuclear technologies. The decision which was taken following the meetings of the foreign ministers at the Governors Council was as follows. They expressed deep regrets for the Iranian violations -- although they didn't refer to them as violations, but named them somewhat differently. No denouncing resolution was taken. And the issue wasn't passed to the Security Council. This had been Iran's greatest fear all along, because the Security Council is the body which can impose sanctions, and even pretty dramatic sanctions. No such thing happened. Furthermore, it was decided that the scope of the enrichment project would be determined by the IAEA. By 'scope' I refer both to content and to validation -- what will be frozen and for how long. Iran announced something else. It announced that it would, indeed, suspend the issue of enrichment, but they said that the suspension would be temporary. The spokesmen said that they would determine the scope and length of the suspension, that the terms would be Iran's, and that the whole process would not be brought to a full stop. Iran submitted a partial report.

Why partial? Because as we will soon see, Iran will continue and continue to lie. It passed a partial report to the IAEA, signed it. And it remained for (them) to sign the Additional Protocol (inaudible). The main dispute -- what is happening in Iran today?

In his last speech, President Bush announced that Iran should be prevented from maintaining an independent fuel (production) line. In other words, Iran should be fully prevented from producing the fuel rods, and from deriving plutonium from radiated fuel. A second issue is that Iran is telling the IAEA, 'Okay. We've shown you everything. Now close this file and let's move on'. The US together with the rest of the great nations, is sure that Iran should be deprived of this option. Nevertheless, Britain, Germany and France believe that some sort of a dialogue might solve the problem. The US is not convinced of this at all. And if we read the Guardian from the past Sunday, we'll also see that Britain, Germany and France are beginning to doubt the possibility of resolving the problem via dialogue. (inaudible) The approach of the non-aligned nations and of several other countries has been to say, 'okay. You did your part. They confessed. Let's leave them alone'. In Iraq, this had worked. After 1991 there were inspections of the UN. Each time they discovered something new the Iraqis said, 'okay. You discovered it. We confess. Let's close this issue and continue'. Iran learned that lesson, and is doing the same thing. Now, (inaudible) possibly this will also be the approach towards Iran, although it transgressed, sinned and violated all the instructions of the Treaty of Non-proliferation of Nuclear Weapons, it is possible that this approach will also be successful there. And now to the principal question of today -- the future attitude towards Iran. I will close with three possibilities as to the future. The first possibility is that they will admit and cease (production) -- they will really renounce the nuclear strategy. If Iran will renounce its nuclear strategy and prove that is has indeed done so and revealed everything, this will be the best possibility both for her and for the world. Regrettably, there is no sign that Iran has chosen this way. The second possibility is to establish a parallel strategy -- to disclose its main strategy, establish a parallel, well-concealed strategy and continue to derive enriched uranium for nuclear weapons, while all the other facilities will be open for inspection and supervision, etc. Is this feasible? Possibly not.

We know, today, that intelligence of the Western countries is good and capable of discovering a great deal. They were the ones to discover the nuclear reactors in Iran. They discovered Libya. And they are capable of doing more. The media claims that Iran has chosen this second way. And, of course, the third option. The third option is one all countries can choose. And some have already chosen it in the past. We are talking about an option of doing everything in a totally legal way -- enriching uranium and deriving plutonium in a legal way under the supervision of the IAEA. A variation of this can be found in North Korea which signed the Non-Proliferation Treaty and consented to inspection. And then when it was discovered that it had, in fact, cheated North Korea finally said -- after many collisions which aren't the subject today -- 'okay. This is a supreme interest of ours. We are leaving the Non-Proliferation Treaty'. Already having all the components for nuclear weapons, within a short while these weapons can be developed. Iran can choose this way. It can choose to continue to derive enriched Uranium. This is the legal way. And this is the implied threat. This might also be the reason it wants the technologies. Be it as it may, this is a possibility which cannot be ignored. This is also the reason the Western countries say that there won't be a nuclear fuel (production) line because this will lead to trouble. As I've already mentioned, in his last speech, President Bush said the same thing. The situation is grave. I, who am usually optimistic, consider the situation in Iran today to be considerably severe, because Iran, being what she is -- and you've heard a lot today about what she is -- can very rapidly go extreme, in which case the situation will be very bad. Will Iran do so? Or will she go in the more desirable way, renounce her nuclear strategy and be reaccepted in the family of nations? I don't have the answers. I hope we will find out, and that it will be for the best.

Thank you.

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