Iran Offers Energy Cooperation at Asia Summit

Chris Buckley and Emma Graham-Harrison, Reuters:

Iranian President Mahmoud Ahmadinejad offered energy cooperation to oil-thirsty China and other countries on Thursday, seeking to win friends but avoiding direct mention of Iran's nuclear standoff with the West.

Ahmadinejad was attending a summit of the Shanghai Cooperation Organization (SCO) as one of four observer states, but his presence threatened to upstage the meeting and irritate the United States as he sought to charm attending leaders.

"We want this organization to develop into a powerful body influential in regional and international politics, economics and trade, serving to block threats and unlawful strong-arm interference from various countries," he said in a speech broadcast on Chinese television. READ MORE

Ahmadinejad spoke after leaders of the group's six members -- China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan -- addressed the one-day summit in China's financial capital, focusing on cooperation in security, finance and fighting drugs.

He added that Iran, the world's fourth-largest oil producer, was ready to host a meeting of energy ministers from member countries to look at cooperation in exploration, exploitation and transportation.

Iran is China's third-biggest supplier of crude oil imports.

The organization was born out of the "Shanghai Five," which was founded in 1996 to demilitarize the border between China and the former Soviet Union.

China now sees it as a way to protect development in the largely Muslim region to its west, arguing that it serves as a bulwark against terrorist activities and religious extremism.

But U.S. officials have suggested China and Russia want to use the group to counter Washington's influence in Central Asia, where the U.S. military has bases or access to facilities.

There were no direct references to frictions with Washington at Thursday's meeting. But a declaration issued by the member countries said they would not "allow their territories to be used to undermine the sovereignty, security or territorial integrity of other member states."

NUCLEAR TENSIONS

Iran's inclusion in the group -- albeit as an observer along with India, Pakistan and Mongolia -- has irked the United States.

"It strikes me as passing strange that one would want to bring into an organization that says it's against terrorism one of the nations that's the leading terrorist nation in the world," Defense Secretary Donald Rumsfeld said earlier this month.

Tehran is considering a package of incentives and penalties the five permanent members of the U.N. Security Council and Germany put forward to persuade it to abandon uranium enrichment.

Tehran says it has a right to a civilian nuclear program, and denies U.S. accusations it is trying to build an atomic bomb.

If Iran rejects the package, the Western powers may push for U.N.-backed sanctions, a step China and Russia have resisted.

Chinese President Hu Jintao and Russian President Vladimir Putin avoided direct mention of Iran in their opening comments to the summit. Hu is scheduled to hold talks with Ahmadinejad on Friday morning, and Russian journalists were told Putin would meet the Iranian leader on Thursday afternoon.

Beijing's long-standing ties and growing trade with Iran give it some leverage in the nuclear dispute, but it is constrained by the economy's dependence on Iranian oil, analysts said.

China on Wednesday urged a positive response to the nuclear offer, but chided reporters for giving so much attention to Iran.

Some in the United States and Europe are starting to worry as much about the timing of Iran's reply as its content. In Washington, a Western diplomat said the main concern was that Iran would string out a response until an International Atomic Energy Agency meeting in September.

During this time it could edge closer to mastering the ability to enrich nuclear fuel, a step Western powers have said would bring Tehran closer to being able to make atomic weapons.

"You can't put the toothpaste back in the tube after it's out," said the diplomat.

(Additional reporting by Lucy Hornby in Shanghai and Sue Pleming in Washington)