By Mark Heinrich and Francois Murphy
VIENNA (Reuters) - The board of the U.N. nuclear watchdog voted on Saturday to report Iran to the U.N. Security Council because of suspicions it is trying to make atomic weapons, a diplomat who was in the session said.
Iran has threatened to respond to the move -- initiated by the United States, EU powers, Russia and China -- by curbing U.N. inspections of its nuclear facilities and scrapping talks on a Russian compromise proposal.
The diplomat said a European Union-sponsored resolution aimed at increasing pressure on Iran to improve its cooperation with an International Atomic Energy Agency probe of its nuclear programme was passed by the 35-nation IAEA board.
Twenty-seven members voted in favour of the motion, five abstained and three voted against, the diplomat said.
The vote had been delayed by a day of haggling between EU powers and 15 developing states from the Non-Aligned Movement (NAM). These tried to soften the resolution for fear it would antagonise Iran and curb their own nuclear energy options.
Diplomats said the EU rejected their attempts to delete a clause mandating that all IAEA investigative reports and resolutions, including one in 2005 declaring Iran non-compliant with nuclear non-proliferation rules, be passed to the Council.
"That was a 'no-no'. Paragraph 2 is the holy grail for us," one EU diplomat said.
Another Western diplomat said that to remove Paragraph 2 would have surrendered to Iranian intimidation. "The threat (to restrict inspections) is on everyone's minds but we consider it blackmail and if we give in to that, there's no end to it."
Diplomats from the EU trio of France, Germany and Britain said they were determined to induce the Islamic Republic to come clean on what they suspect is military involvement in nuclear work, and to stop enrichment of uranium.
U.S. and EU leaders, aware that Russia, China and developing states wanted to avoid a showdown with the world's fourth biggest oil exporter, insisted that reporting Iran would not finish off diplomacy or trigger early sanctions.
NAM states argued that Paragraph 2 could be construed as ending IAEA oversight of Iran and paving the way to sanctions before the IAEA concludes its investigations into Iran's atomic energy programme -- which it concealed for 18 years until 2003.
Iran says it wants only nuclear power, not bombs, and that it has a sovereign right to make uranium fuel on its own soil.
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An EU3 source said another controversy that held up action in Vienna was a dispute over a clause, backed by Egypt, saying that resolving the Iranian issue would contribute to the creation of a nuclear weapons-free zone in the Middle East.
The wording clearly alluded to Israel, the EU3 diplomat said, and proved unacceptable to Washington. Israel has never confirmed or denied it has a nuclear arsenal, but is believed to have about 200 atomic bombs.
IAEA Director-General Mohamed ElBaradei is due to deliver a sweeping report on Iran's nuclear programme at a regular meeting of the agency's board on March 6.
Russia and China endorsed the resolution last week after winning guarantees from Washington and the EU3 that there would be no push for Security Council action before March, removing the biggest barrier to the resolution.
"Once this is on the agenda of the Security Council, we foresee a graduated approach to bring additional pressure on the leadership in Tehran to achieve a negotiated settlement," U.S. Ambassador Gregory Schulte told reporters on Friday.
But Iran's deputy nuclear negotiator warned that involving the Security Council would also kill talks on Russia's offer to guarantee a supply of uranium for Iran's power stations, designed to ensure it cannot be diverted for weapons.
Iran says there us no legal basis to report to the Security Council since the IAEA has found no hard proof of a weapons programme. It says Washington's aim is to topple Iran's Islamic government, which has called for the destruction of Israel.
"The Iranian threat is serious and there's fear we are entering a risky period of polarisation and confrontation that will do no good for either side," said a senior diplomat not involved in the push to report Iran to the Council.
"If the IAEA loses snap inspection access, a vacuum will ensue where others step in and make accusations the IAEA cannot check out, and where could that lead? We are in need of ideas on how to solve this peacefully."
Iranian negotiator Ali Larijani called on Germany, France and Britain to restart talks on a diplomatic solution. But they say Iran must first reverse its move to resume atomic research and small-scale enrichment of uranium, announced on January 9.
(Additional reporting by Parisa Hafezi and Paul Hughes in Tehran)
