White House Softens Iran Nuclear Response

WASHINGTON, Aug. 24, 2006 — -- The State Department said Wednesday that Iran has failed to respond adequately to a demand by the United Nations that it verifiably suspend its nuclear enrichment program.

Iran had been given an Aug. 31 deadline by the U.N. Security Council to respond to a proposal aimed at deterring the country from continuing its uranium enrichment activities, but chose to respond to the proposal Tuesday.

While the details of the response have not been made public, Iran said its response offers an opportunity for "serious" talks on its nuclear program.

In a statement Wednesday the State Department promised to review Iran's response but said that it "falls short of the conditions set by the Security Council, which require the full and verifiable suspension of all enrichment-related and reprocessing activities."

The tone of that statement, however, was milder than the Bush administration had envisioned on Tuesday.

U.S. officials tell ABC News the White House had intended to issue a stronger statement rejecting Iran's response and calling for talks on sanctions against Iran to begin quickly, but pressure mounted from European countries overnight to hold off on the strong language and to allow time for countries to carefully consider Iran's response.

Ultimately, U.S. officials say, the United States yielded to pressure from the European countries, namely Britain and France, to issue the milder statement that was released today.

On June 1, six countries -- the United States, Great Britain, France, Germany, Russia and China -- agreed upon a package deal to convince Iran to give up its nuclear weapons ambitions. The proposal outlined incentives for Iran to suspend its programs and penalties if it didn't.

The package was endorsed by the U.N. Security Council in a resolution on July 31. The resolution threatened economic sanctions on Iran if it did not verifiably suspend its program within a month.

Formal discussions on what exactly those sanctions will entail will be discussed after the Aug. 31 deadline, but they are expected to reflect the incentives and disincentives outlined in the package deal.

Although the package has not yet been made public, a copy obtained by ABC News outlines the incentives and penalties.

Incentives being offered to Iran for its compliance include lifting current sanctions on the country, including allowing sales of Boeing aircraft and parts to Iran, as well as providing a guaranteed fuel supply for Iran's civilian nuclear program and help building nuclear reactors for civilian purposes.

U.S officials told ABC News that the penalties could include possible travel bans on certain top Iranian officials and a freezing of their assets.

ABC News White House correspondent Martha Raddatz contributed to this report.