Rice warns of more Iran sanctions

Secretary of State Condoleezza Rice said in an interview Wednesday that Iran’s response to an international demand for a freeze in the regime's nuclear activity “is not a really serious answer” - and said new economic sanctions are likely to result.

“Iran has a way out if they ever wish, but we will seriously pursue sanctions if they don’t,” Rice told Politico and Yahoo! News. “You have to hope that there are reasonable people in Iran who see this as not the way to run a country.”

In her first public comments since a conference call between six world powers on Wednesday to determine their next step on Iran, the secretary maintained that the U.S. does not view Iran as “a permanent enemy” and has “been pretty tough with them already” by backing three sets of United Nations sanctions.

U.S. officials said Iran’s response, delivered Tuesday to the six-nation group, to a new package of incentives to stop its enrichment and reprocessing of uranium was disappointing and insufficient. The package had offered to drop current sanctions if Iran froze its nuclear program.

“They should have felt like time is running out quite a long time ago,” she said in an elegant reception room near her private suite. “When you are having trouble getting banks to come in, getting investment, when export credits are going down from around the world, when you have inflation roaring, time is running out.”

The six-nation group – the five permanent members of the UN Security Council plus Germany - contends that Iran is building nuclear warheads under the guise of a civilian power program. Rice said the dictatorship will have to “make a tough decision” to avoid a further financial squeeze from the Security Council, which she believes is likely to act this fall.

“What is happening to Iran is that its isolation is costing them,” she said. “It’s having an effect. I think that’s one reason that you’re seeing them trying to give half-answers rather than simply saying no. But the fact is we won’t accept half-answers, either.”

Rice said there was consensus among Washington’s diplomatic allies on how to respond to the latest talking points from Iran. “They agreed that the Iranian answer is not adequate, that it is not a really serious answer,” she said. “And so we’re now going to begin to consult on how to get back on the second track, which is to move again toward … a Security Council resolution.”

Russia's envoy to the UN, Vitaly Churkin, said his government hadn't agreed to impose further sanctions and hoped for a resolution through further talks.

Rice said the Bush administration still believes “that the diplomatic option can work and that there is time for it to work.” She said part of her optimism stems from “elites” in Iran “who don’t want to see this kind of isolation because of business interests or other” reasons.

“I think there is a lot of ferment in Iran right now,” she said. “Even in their newspapers, as controlled as they are, [there is] a lot of questioning of the policies of President [Mahmoud] Ahmadinejad. After all, inflation is running wild in Iran. It’s a country that’s experiencing, of all things, brownouts in a country that has as much energy as it does.”

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