Iranian President Mahmoud Ahmadinejad
Photo: Reuters
Obama: Israeli attack on Iran not ideal
US president says nuclear Iran would be 'real problem', but that diplomatic solution is still preferable. Meanwhile, Western powers consider sanctioning Central Bank of Iran, which helps blacklisted banks carry out transactions
US President Barack Obama said on Monday that Iran having a nuclear weapon would be a "real problem" but he did not think military action by Israel or the United States was the "ideal way" to solve the crisis. Meanwhile Western powers considered sanctioning the Central Bank of Iran.
"We continue to be open to diplomatic solutions to resolve this," Obama told a town-hall style meeting on CNBC.
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"We don't think that a war between Israel and Iran or military options would be the ideal way to solve this problem. But we are keeping all our options on the table," he said.
Reuters reported Monday that the United States, Britain and some other European countries have also considered the possibility of sanctioning the Central Bank of Iran (CBI), which one Western diplomat described as the "kingpin" of Iran's efforts to conceal banned transactions outside Iran.
But the idea lacked sufficient support on the Security Council for inclusion in the latest round of sanctions. China and Russia, which have close economic ties with Tehran and fought to dilute all four UN sanctions resolutions before adoption, rejected it.
The United States and EU have also decided not to blacklist the CBI, which could make it difficult for Iran to engage in any foreign trade, though they persuaded other Security Council members to urge UN member states to be vigilant regarding all transactions linked to the CBI.
Dubai used as financial center
The CBI has been helping sanctioned Iranian banks cover their tracks by arranging for alternate institutions to carry out transactions on their behalf, US and EU officials say.
The CBI then settles accounts back in Tehran, away from the prying eyes of Western authorities.
Western officials say that Dubai also remains a key financial center for Iran. Dubai was Iran's fifth biggest trading partner in 2009.
Authorities in Dubai say that they have been cracking down on Iranian activities and are complying with the UN sanctions, but Western diplomats voiced skepticism. "I haven't seen anything to indicate that Dubai has changed in any fundamental way," a Western envoy said.
Even though Iran has pressed ahead with its nuclear program, and is enriching uranium to levels much closer to those needed for weapons than ever before, Western officials insist that the international sanctions have slowed down Tehran's progress on its atomic program.
"The four UN sanctions resolutions have had an impact," a senior Western diplomat told Reuters. "It's not easy to quantify, but we estimate that the sanctions have delayed Iran's nuclear program by 18 months to two years."
They add that the setback would be more severe if all countries implemented the sanctions as aggressively as they could.
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