UN nuclear watchdog holds talks in Iran International Atomic Energy Agency chief inspector Herman Nackaerts (C) at Vienna airport before b...

UN nuclear watchdog holds talks in Iran

International Atomic Energy Agency chief inspector Herman Nackaerts (C) at Vienna airport before boarding a plane to Iran, on February 19, 2012. A delegation from the UN nuclear watchdog arrived in Tehran early Monday for a two-day visit aimed at seeking a solution to a dispute over Iran's nuclear programme, the ISNA news agency said. (AFP Photo/Dieter Nagl)

UN nuclear watchdog officials arrived in Tehran on Monday for discreet talks on Iran's suspect atomic activities, amid a worsening international showdown that has sent tensions and oil prices soaring.

The International Atomic Energy Agency (IAEA) is hoping for "concrete results" from the two days of talks focused on "the possible military dimensions of Iran's nuclear programme," the delegation's leader, chief UN nuclear inspector Herman Nackaerts, said on departing from Vienna late Sunday.

But he cautioned progress "may take a while."

Iran has taken an increasingly defiant stance against Western sanctions and Israeli threats of military action against it.

On Sunday, its oil ministry announced crude exports to France and Britain had been halted, apparently in retaliation for an EU ban on Iranian oil that is being phased in during the next five months.

Although Iran provides less than three percent of France's oil imports and almost none of Britain's, oil traders took fright at the prospect of Iran expanding its measure to the rest of Europe, which buys 20 percent of its crude.

Brent North Sea crude for April delivery soared to an eight-month high, up $1.52 to $121.10 in Asian trade. New York's main contract, West Texas Intermediate light sweet crude for March delivery, jumped $1.72 to $104.96 per barrel.

The Islamic republic has also in recent days flaunted what it said was "major" nuclear progress, declaring it was adding thousands more centrifuges to its uranium enrichment activities and producing what it said was 20-percent enriched nuclear fuel.

The IAEA, which in November issued a report voicing strong suspicions that Iran was researching an atomic weapon and missile warheads, confirmed last month that a new, fortified uranium enrichment plant outside Iran's holy city of Qom had been activated.

The West has ratcheted up its sanctions to try to force Iran to stop enrichment, but with no success so far.

Israel, which believes its existence is threatened by a nuclear Iran, has stepped up its warnings that it could launch air strikes, prompting the United States and Britain to urge restraint.

Recent assassinations of three Iranian nuclear scientists, and attempted bomb plots against Israeli diplomats in several countries pointed to a possible covert war between the two Middle East arch foes.

But Iran has also agreed to an EU overture to revive talks with world powers that collapsed a year ago.

The head of Iran's Atomic Energy Organisation, Fereydoon Abbasi Davani, told Al-Alam television that the powers -- the so-called P5+1 group consisting of the five permanent UN Security Council members plus Germany -- should let up with the pressure.

"They would do better to change their method, because what they've used in the past hasn't met with success," he said.

"We are going to pursue our (nuclear) path," which is purely for peaceful ends, he said.

Abbasi Davani added that previous talks on providing Iran with nuclear fuel were now invalid, "because we produce our own fuel -- now when we sit down at the table, it'll be us who will ask them (the P5+1) if they want fuel."

He also taunted Israel, which he said was "afraid of the progress we've made in the nuclear field."

The official, who escaped an assassin's bomb in 2010, said: "They have done all they can, killing our nuclear scientists. If they haven't attacked Iran by now it's because they're not able to do so."

But should an attack occur, he warned, Iran's military "will deal an appropriate response."

The chief of Iran's elite Revolutionary Guards, General Mohammad Ali Jafari, told state television the West was responsible for the jitters that have sent oil prices higher.

"The crisis they have provoked in the region has led to a hike in oil prices, and they are feeling the impact," he said.

"By deploying their military forces to the Persian Gulf and the Sea of Oman, they are are trying to control the crisis. But the more they display and deploy their forces, the worse the effect becomes."

Ali Jafari said current military exercises in southern Iran were to show the Islamic republic's capability to react to any threat. And he intimated Iran could close the strategic Strait of Hormuz at the entrance to the Gulf if needed.

"We see ourselves as responsible for protecting Iran's borders, and also those of brother Muslim countries, notably when it comes to security in the Strait of Hormuz," he said.

(Agencies)