Iran is working on nuclear missile, warns Powell

Iran loomed as the second Bush administration's most urgent foreign policy challenge yesterday, as Colin Powell, the outgoing Secretary of State, warned that the country was working on a missile capable of delivering a nuclear bomb.

Iran loomed as the second Bush administration's most urgent foreign policy challenge yesterday, as Colin Powell, the outgoing Secretary of State, warned that the country was working on a missile capable of delivering a nuclear bomb.

An Iranian exile group has also claimed that the Islamic government is operating a clandestine uranium-enrichment programme at a secret facility in Tehran, in defiance of its undertakings with European governments and the UN's nuclear watchdog body, the International Atomic Energy Agency, based in Vienna.

Iran denied the claims late yesterday. A foreign ministry spokesman, Hamid Reza Asefi, said the claims were intended to damage Tehran's relations with Europe and the UN nuclear agency. "The claims are raised to destroy the positive atmosphere that resulted from the Paris agreement," Mr Asefi said.

That agreement with France, Germany and Britain to suspend uranium enrichment, was made last weekend in return for as yet unspecified economic and political concessions.

The follow-up from the nuclear claims will be a crucial indicator of how US policy in the Middle East develops under General Powell's successor, Condoleezza Rice, who is widely seen as more hard line. They could also provoke new strains in the fragile relations between the Bush administration and Europe.

General Powell told reporters travelling with him in South America that he had seen "information that would suggest they have been actively working on delivery systems," adding that "you don't have a weapon until you put it in something that can deliver a weapon".

The National Council of Resistance, a leading Iranian opposition group, held press conferences in Paris and Vienna in which it said that not only was Iran still working on its secret enrichment programme, but it had obtained blueprints for a bomb from the renegade Pakistani nuclear scientist Abdul Qadeer Khan and bought enriched uranium on the international black market. The claims make it more likely that Iran will be brought before the UN Security Council for censure over its nuclear activities, something the US has long desired, but agreed not to press openly while negotiations with the Europeans offered a chance of success.

The gathering crisis has distinct parallels with the situation before the March 2003 invasion of Iraq. Then it was the exiled leader Ahmed Chalabi who stoked the fire in Washington, providing a stream of now-discredited defectors purporting to have "evidence" of Saddam Hussein's weapons programmes.

The accusations were aired by General Powell, who went before the Security Council in February last year to make the case for Iraqi weapons of mass destruction, a case that has now collapsed.

"This could be the perfect storm," said David Kay, the former chief of the US weapons inspection team in Iraq.

"It's likely that Iran is pursuing a nuclear bomb," he said, but after the events in Iraq "it will be hard to convince the Europeans and the IAEA that that is what is happening".

Commentators are split over the truth of this week's claims, but they are bound to harden the resolve of the new administration to deal with Iran.