Oct 2, 2009

EU gives three airlines anti-trust warning

BRUSSELS — The EU competition regulator said on Friday that it has warned British Airways, American Airlines and Iberia over agreements on transatlantic routes which could breach anti-trust rules.

The regulator, the European Commission, said that it had sent a "statement of objections" last month to the three companies, which are all members of the oneworld airline alliance.

The action concerns agreements between them "regarding the coordination of the parties' commercial, operational and marketing activities in relation to passenger traffic on transatlantic routes," it said in a statement.

"The commission considers (the accords) may be in breach of European rules on restrictive business practices," it said.

"Pursuant to these agreements, the parties intend to jointly manage schedules, capacity and pricing, as well as share revenues on transatlantic routes between North America and Europe," the statement added.

The three airlines said on August 14 that they had signed an agreement to cooperate on flights between North America and Europe to help them to overcome soaring fuel costs.

The venture between American Airlines, BA and Iberia came as British Airways and Spain's national carrier also discussed separate plans for a multi-billion-dollar merger.

A "statement of objections" is a formal step in anti-trust investigations.

Under the procedure, the commission informs the parties in writing of the objections raised against them. They can reply in writing setting out their defence, and can also request an oral hearing to present their case.

Brussels can then take a decision on whether their conduct breaks any rules.

The commission also said that a parallel investigation into four members of the Star Alliance, as well as a probe of some participants in the Skyteam group, are also continuing.

Sep 27, 2009

Housing data sinks Wall Street

Stock markets in the United States fell yesterday as signs of weakness in housing and investors' worries that authorities might be curbing stimulus efforts too soon sparked caution.

World central banks said they would scale back infusions of U.S. dollars, fueling unease triggered a day earlier when stocks sold off following the U.S. Federal Reserve's decision to slow purchases of mortgage debt. That program has been one of the key pillars of the Fed's efforts to support mortgage lending.

Yesterday's losses drove the benchmark S&P 500, which has rallied nearly 60% in six months from 12-year lows, to its worst two-day drop in three weeks.

The Dow Jones industrial averagedropped 41.11 points, or 0.4%, to 9707.44. The S&P 500 fell 10.09 points, or 1%, to 1050.78. The Nasdaq slid 23.81 points, or 1.1%, to 2107.61.

G20 Leaders Tout Progress on Bank Regulation, But Big Issues Remain

"What would have been considered as a provocation until only recently is now seriously looked at by the G-20," Sarkozy said. He was referring in particular to the G-20's request that the International Monetary Fund look at possible ways in which the financial sector could "make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system."

Several unresolved issues remain, however. U.S. officials have argued that the world's largest banks should hold much more capital than other financial companies because of the risk they pose to financial markets, but European officials have resisted and appear to be holding their ground.

There is broad agreement among leaders that banks should hold more capital, but the split hinges on whether the largest banks should hold even more than everyone else, a position the U.S. holds.

"The largest, most interconnected firms should face significantly higher capital and liquidity requirements," U.S. Treasury deputy secretary Neal Wolin told a group of financial executives Thursday.

The Financial Stability Board, an group of regulators asked by the G-20 to develop recommendations, issued a list on Friday that appeared to side with European concerns, saying it would "assess" whether to make such a move for large, systemically important banks.

The communiqué appeared to side with the FSB's view, saying "standards for large global financial firms should be commensurate with the cost of their failure." It did not say that large banks should hold even more capital than others, or even that they were considering such a position.

In other areas, the FSB was more direct. It said bank regulators "should limit" bonuses paid to employees "as a percentage of total net revenues when it is inconsistent with the maintenance of a sound capital base." This reflects an aggressive push by France and Germany to limit the amount of money banks pay executives or employees who influence the company's risk.

The FSB also said more than 50% of bonuses "should be awarded in shares or share-linked instruments" to ensure that the incentives are aligned with the "long-term value creation and the time horizons of risk." The communiqué said it "fully endorsed" the FSB's position on "aligning compensation" in this area, though it did not mention these specific percentage limits.

U.S. officials, led by the Federal Reserve, are looking to crack down on compensation as well, but they aren't expected to be as proscriptive. If European regulators decide that bonus pools should be limited to a certain percentage of revenue, this could become a major issue for U.S. officials.

Domestic regulators have always supervised their own banks differently, but there has been a push in recent years to more closely coordinate bank supervision because many large institutions operate globally. The FSB report stressed the importance of global standards on capital, compensation and derivatives.

Another area that could potentially become an issue is the regulation of over-the-counter derivatives. The FSB recommendations and communiqué said these products should be traded on exchanges "where appropriate." The White House has also held this view, but Senate Democrats, have suggested they are more inclined to require banks to process these contracts through a central clearinghouse. This is a position endorsed by the banking industry.

Congressional Democrats are pushing to overhaul financial market regulation by the end of the year, but they have run into resistance from Republicans, business leaders, and conservative Democrats worried about constraints on growth.

Some of the initiatives, such as higher capital requirements and tougher compensation rules, can be done without Capitol Hill's involvement.

Is anyone listening?

YOU are not really listening’, Mohammad Nasheed of the Maldives told a hundred fellow heads of state and government at the ‘UN Summit on Climate Change’ at New York this week. ‘If things go as usual, we will not live. We will die. Our country will not exist.

‘We cannot come out from Copenhagen as failures. We cannot make Copenhagen a pact for suicide. We have to succeed and we have to make a deal in Copenhagen.’ He was referring to the UN Climate Change Conference to be held in December 2009 in that city (COP 15).

President Nasheed leads a predominantly Muslim nation of some 300,000 people on 26 atolls in the Indian Ocean (1,192 islets – 200 inhabited) where ecologically sustainable fisheries, and more recently tourism, have sustained the islanders’ life for thousands of years. The average ground height in the islands is a mere 1.5 metres above sea level, and now, in the 21st century, is being threatened with complete inundation by melting ice and rising ocean levels.

UN Secretary General Ban Ki-moon agreed: ‘Failure to reach broad agreement in Copenhagen would be morally inexcusable, economically short-sighted and politically unwise’.

Over the last 250 years, human activities have added further quantities of greenhouse gases (GHG) to the atmosphere, including carbon dioxide (from burning fossil fuels; coal, oil and gas in homes, factories, power stations and vehicles; deforestation), methane (from decaying natural fertiliser; domesticated cattle; termites), nitrous oxide (from fertilisers, vehicle exhausts) and chlorofluorocarbons (from refrigerants, fire-extinguishers, aerosols). The increased levels of GHG reduce the amount of solar heat reflected back into space, raising temperatures. This is already leading to radical weather changes, dissolving ice caps and glaciers, sea-level rise, increasing pollution, water shortages, reduced agricultural outputs, food scarcity, escalating health problems, migrations in search of food, etc.

Mankind’s greatest contribution to GHG, accounting for two-thirds of the climate-change effect, is carbon dioxide (CO2.). Concentrations have risen from about 270ppm (parts per million) in 1750 at the start of the industrial revolution to 280ppm by 1850, 295ppm by 1900 and to 310ppm by 1950. The rise thereafter was more rapid: 345ppm by 1985, 360ppm by 1995, 381ppm by 2005, and today it stands at around 390ppm, the natural range being 180-300ppm. We are adding approximately 2ppm annually.

As highlighted in my column printed earlier this month, human beings have been steadily but surely ramping up two critical factors in their existence: population and per-capita impact on the planet, leading to unsustainable exploitation of the earth’s resources and an overloading of its capacity to absorb human wastes. The greatest transition in human history – the exploitation of fossil fuels and the emergence of societies dependent on high energy use – now spells a form of ecological suicide.

For those who are concerned and wish to act, the internet is replete with websites that give details of the problems and recommend steps to be taken to tackle the issues, one site being 350.org.

Based on the concept that 350ppm is a scientifically defined safe upper limit for CO2 in the atmosphere, the movement is trying to immediately mobilise citizens of the planet to compel their leaders to take drastic measures for swift and bold climate action at the December UN COP15 in Copenhagen. Technical and political action must be put in place on an emergency basis to reduce and permanently maintain CO2 emissions in the atmosphere at below the 350ppm level. Registering at the site enables one to join the action as a concerned individual or as a part of an involved activists’ group this Oct 24, the ‘International Day of Climate Action’.

350.org promises that ‘There will be big rallies in big cities, and creative actions across the globe: mountain climbers on highest peaks with banners, underwater demonstrations in island nations (including the Maldives) threatened by sea level rise, churches and mosques and synagogues and ashrams engaged in symbolic action, star athletes organising mass bike rides – and hundreds of community events to raise awareness of the need for urgent action… Copenhagen may well be the pivotal moment that determines whether or not we get the planet out of the climate crisis, and your actions on Oct 24 will help our leaders realise we need a real solution that pays attention to science.’

Experts feel that there are six scenarios that could develop in Copenhagen: (1) ‘A real deal’: the US and China provide the driver for a new, ambitious and comprehensive agreement. (2) ‘Business as usual’: countries follow current national targets. (3) A limited deal: headed by, say, the G8, outside the UN Framework Convention on Climate Change. (4) A mere prolonging of the Kyoto Protocol. (5) A stretching of the Copenhagen conference into 2010. (6) ‘Window dressing’: a grand declaration but no real deal. What actually emerges will depend in no small measure on the kind of pressure citizens all over the world, including Pakistan, can exert on their leaders and governments.

Shehri, the environmental advocacy group, last week wrote a letter to Prime Minister Syed Yousuf Raza Gilani requesting him to issue a directive banning the use of suits, ties and jackets in the air-conditioned summer months in all government offices and ministries, as recently done in Bangladesh. The directive must ensure that air-conditioning temperatures are kept above 26 centigrade and heating temperatures below 18 centigrade. In the next phase, this campaign to combat climate change (plus electricity and gas loadshedding) can be extended to the private sector.

Is anyone in Pakistan really listening? Certainly not its President, who due to a ‘more important engagement of his own’ opted out of the UN Climate Change summit in New York, which was also addressed by US President Barack Obama.

RBS to sell fund manager for £300m

Royal Bank of Scotland is selling the majority part of its £50bn asset management arm as part of a series of fund-raising moves.
RBS is engaged in the final stages of negotiating the cost of its entry into the Government?s insurance scheme for toxic assets Photo: GETTY

The disposal will break up RBS Asset Management (RBSAM), with RBS retaining the upmarket private bank Coutts, while putting the other half up for sale with a £300m price tag.

Morgan Stanley, which is advising RBS on the sale, has sent out information memorandums on the company to a series of private equity and trade buyers ahead of next month’s bid deadline.

It comes as RBS is engaged in the final stages of negotiating the cost of its entry into the Government’s insurance scheme for toxic assets, which is expected to be concluded within weeks. The bank is keen to minimise the expected increase in the state’s shareholding.

RBSAM manages money on behalf of institutions and high net worth individuals and specialises in investing in alternative asset classes, such as private equity, credit and hedge funds.

Although RBS has received several expressions of interest in Coutts, it is not believed to be up for sale. Consequently the Coutts’ assets within RBSAM are being held by the bank.

A sale of the operation is one of several actions, including a rights issue, being pursued by RBS to raise cash towards the cost of taking part in the Government’s Asset Protection Scheme (APS).

RBS is expected to have to pay up to £19.5bn to join the APS and insure £325bn of its most troubled loans against losses under an agreement made with the Government in February. That plan involves RBS issuing £19.5bn worth of non-voting 'B’ shares to the Government as a fee. Such a move will lift the Government’s stake in the business from 70pc to about 85pc.

While the bank recognises that the taxpayers’ shareholding will inevitably increase, its new chief executive, Stephen Hester, is keen to cede as little as possible.

The more cash Mr Hester can raise through disposals such as RBSAM, the less shares he will have to issue to the Government.

The bank has already sounded out major investors about backing a rights issue or share placing to raise up to £5bn and other disposals may also be considered.

This week RBS said: “As part of our overall assessment of the APS, ahead of the board making a recommendation to shareholders, the group is considering whether there are any partial alternatives to the issuance of 'B’ shares to the Government.”

Shoppers' anger as M&S ditches famous 90-day returns policy Read more: http://www.dailymail.co.uk/news/article-1216439/Shoppers-anger-M-amp-S-ditches

Generations of shoppers remained loyal to Marks & Spencer, comforted by the knowledge it had the most generous refund policy on the High Street.

For decades there was no time limit on returning a skirt or pair of shoes, providing they were unused, there was a receipt and it could be put back on the racks.

However in 2005, the store triggered some anxiety by imposing a maximum return date of 90 days.

And now it has now emerged that the deadline has been reduced again, without any fanfare, to just 35 days.

Internet forums reveal that a number of shoppers are unhappy about the change, which appears to have been prompted by cost-cutting at the store which is celebrating its 125th birthday.

It seems to be part of a rolling policy of money-saving measures that have previously seen M&S abandon its commitment to British manufacturers in favour of cheaper foreign factories.

Shirley Read, aged 53, was caught out by the changes when she was told she could not return a £45 dress to the M&S store in High Wycombe.

Mrs Read, from Beaconsfield said 35 days was too short a time.

She said: 'I had lost a lot of weight and needed to buy a whole new wardrobe. I bought two dresses of similar design, but different colours at the end of June.

'I decided to return one, but thought it would be fine to leave it until I came back from my summer holiday because I have never had any problem taking things back to M&S.

'However, when I returned to the store in August I was told that I had missed the deadline for a return. I couldn't believe it, I had no idea items had to be taken back within 35 days and other people don't seem to know about it either.

'I felt like I was treated very badly. I was told the receipt was no longer valid, but that I could have a refund of £15 which was the price the dress had been reduced to in the sale.

'It was very stressful. I had a terrible headache and felt quite ill. I nearly collapsed in the store and they had to call a First Aid helper for me.'

Mrs Read said: 'Essentially they were trying to fob me off with £15 for a dress that I had paid £45 for. It was in pristine condition, it had never been worn and all the labels were in tact.'

She said the change would make her think twice about buying Christmas and birthday presents from M&S.

'In the past I have bought gifts earlier in the year because I don't like the crowds around Christmas. But if I do that now, I am worried that people will no longer be able to return them,' she said.

The change in policy came into effect in April, however it arrived without fanfare and many people are unaware of it.

'I think M&S should have done far more to alert customers to the change in their policy,' said Mrs Read.

Following the change, M&S now prints a date on the bottom of the receipt as the final 35 day deadline for getting a full refund.

A spokesman for the store said: 'The M&S returns policy is the best on the high street.

'We offer our customers a full refund or exchange on goods returned within 35 days, which compares favourably to our competitors, many of which offer just 28 days.

'The last date for return is clearly printed on the till receipt and the overwhelming majority of our customers return unwanted items well within this period - in fact, two thirds of them return within two weeks.'

Read more: http://www.dailymail.co.uk/news/article-1216439/Shoppers-anger-M-amp-S-ditches-famous-90-day-returns-policy.html#ixzz0SJajOESM

UK car production falls 31.5pc as fears grow over car scrappage scheme

A pick-up in new car production driven by the launch of the scrappage scheme ended in August, sparking concerns for the health of the industry when the Government's £300m programme ends.
One industry analyst claimed the incentive plan, which encourages consumers to scrap an old car for a new model, could run out of funding as early as next week and called on the Government to extend the scheme.

UK car production fell 31.5pc in August, ending a run of three consecutive months when the decline caused by the financial crisis eased.

The scrappage scheme had helped to turn a 56.5pc year-on-year drop into a 23.7pc decline by July by boosting consumer demand for new cars. However, production fell back again in August, which is a traditionally quiet month, as scrappage schemes across Europe began to end.

Nonetheless, the success of the UK scheme means that the proportion of cars being built in the UK for the domestic market has risen to a four-and-a-half-year high of 33.8pc.

However, Paul Everitt, the Society of Motor Manufacturers and Traders chief executive, said the recovery in the market is "extremely fragile".

Car makers have cut jobs and shifts as sales have slumped and further jobs are under threat at Vauxhall after a deal between General Motors and Magna. Jaguar Land Rover, which employs 14,500 people in the UK, yesterday announced plants to close one of its sites in the Midlands.

Lord Mandelson, the Business Secretary, yesterday warned the UK manufacturing could be a "loser" from foreign ownership in light of the Vauxhall situation and Kraft's approach to Cadbury. "I am keeping a weather eye on this area," he added.

Mr Everitt, who also called for the scrappage scheme to be extended, said: "Underlying demand remains weak and the recovery is still extremely fragile."

The Government's plan runs until 300,000 cars have been registered or the end of February. As of September 13, some 215,740 vehicles had been registered under the scheme and, with September being the busiest month of the year as new registrations are launched, David Raistrick, the UK manufacturing leader at Deloitte, warned it could end imminently and at the "wrong time" for the industry.

Meanwhile, Renault shares slid 2pc in France yesterday as the company continued to suffer the fallout from the "fake crash" saga in Formula One.

ING, the Dutch financial group, was the main sponsor for Renault's F1 team but it has demanded that its emblem be taken off the car.

Spanish insurer Mutua Madrileña has done the same, claiming that its "good name" could be threatened by association with the Renault team.

New Look ponders market listing

New Look ponders market listing
Fashion chain New Look is considering a £1.7 billion stock market flotation, it has been reported.
The group, which is owned by private equity firms Permira and Apax, as well as its founder Tom Singh, could list on the stock market during the first quarter of next year, according to the Sunday Telegraph.
Investment banks are said to be lining up to handle the flotation, with Merrill Lynch, Goldman Sachs, Citigroup and Credit Suisse all thought to be interested.
It is understood that the company is also looking for a new chairman with City experience to handle the listing, with current chairman Phil Wrigley expected to leave the group.

The possible flotation comes just over two years after the group abandoned plans to list on the stock market after a lukewarm response from investors, while a £2 billion sale of the business also failed when the company was unable to agree a price with potential suitors.
Weymouth-based New Look was founded in 1969 by Tom Singh, and was taken private in 2004 by Apax and Permira for £700 million, with Mr Singh retaining a 22% stake.
Since then its new owners have invested more than £400 million in the business, although it currently has a £1.1 billion debt.
New Look is one of the few retailers to be benefiting from the economic downturn, as cash-strapped consumers look for value for money.
Earlier this year the group reported a 10% rise in annual earnings, claiming more than a third of British women and girls had bought an item from its womenswear ranges during the year to March 28.
Underlying earnings for the year grew to £217.6 million, while like-for-like sales in the UK and Republic of Ireland were up 1.4%, compared to a 3.4% fall the previous year.
Copyright (c) Press Association Ltd. 2009, All Rights Reserved.

New Look 'seeks stock flotation

Fashion chain New Look is poised to return to the stock market with a flotation as early as next year, according to reports.

The company was bought by private equity firms Permira and Apax in 2004, although founder Tom Singh still retains a 22% stake.

New Look is one of the few High Street retailers to have benefitted from the downturn as consumers look for value.

Reports also suggest that the company will look for a new chairman.

The owners tried to float the business unsuccessfully in 2007. They then tried to sell it, but did not receive an offer to meet their price.

But with sales improving during the downturn - they rose by 15% in the year to the end of March - the owners have been encouraged to try to float once again, the reports say.

A number of investment banks are said to be interested in handling the flotation, including Merrill Lynch and Goldman Sachs.

Fame': Where are they now?

Another Optimistic Bunch, Determined to Live Forever
Of course. After three “High School Musical” installments, “Bandslam” and the Fox series “Glee,” “Fame” — the 1980 film that spawned a stage show and a television series or two — was due for a makeover. The new version, like the first, covers four years at a New York performing-arts high school. And while the movie, the feature debut of the choreographer and video director Kevin Tancharoen, suffers from a surfeit of flash, it nonetheless offers the undeniable power of young performers pursuing art at peak dexterity.

“Fame” revisits some of the original’s sequences, including a spontaneous lunchroom dance jam and an attempted subway suicide. But primarily it offers new predicaments for its students, among them Marco (Asher Book), an easygoing John Mayer look- and sound-alike; Jenny (Kay Panabaker), Marco’s girlfriend and a repressed actress; Neil (Paul Iacono), a goofy film director trying to finance a short; and Alice (Kherington Payne), an upper-crust dancer. Ahead of the pack are Naturi Naughton, as a classical pianist whose father disapproves of her pop-singing aspirations, and Collins Pennie, as an intense rapper-actor from the projects.

Codgers can savor the glimpses of the teachers, played self-effacingly by Charles S. Dutton, Kelsey Grammer, Megan Mullally and Bebe Neuwirth, few of whom are flattered by the camera (though Ms. Neuwirth looks great). From the original, only the actress-choreographer Debbie Allen returns, as the principal.

The 1980 “Fame,” directed by Alan Parker, melded fantastical sequences with quasi-vérité visuals, brisk editing and urban grime. It also addressed issues like stage mothers, coming out of the closet, racial competition, teenage pregnancy and demands for screen nudity.

For grit, the 2009 “Fame” offers a desaturated palette. Alice’s affair with a working-class composer merely glances at class tensions; the most daunting peril is the casting couch. Rebellion? A first-time drinker is inebriated, vomits and vows never to touch alcohol again.

A closing multidisciplinary extravaganza lets Mr. Tancharoen and his cast flaunt their chops, and viewers, as with “Hair” 42 years ago, can celebrate the glorious image of youth in full creative flower. Yet when Ms. Mullally gives a speech about why her character left show business, you’re compelled to ask: Whatever became of Irene Cara and the other stars of the first “Fame”?

“Fame” is rated PG (Parental guidance suggested). It has skeptical, repressive parents.


Opens on Friday nationwide.

Directed by Kenny Tancharoen; written by Allison Burnett, based on the motion picture “Fame” written by Christopher Gore; director of photography, Scott Kevan; edited by Myron Kerstein; music by Mark Isham; choreography by Marguerite Derricks; production designer, Paul Eads; produced by Tom Rosenberg, Gary Lucchesi, Richard Wright and Mark Canton; released by Metro-Goldwyn-Mayer Pictures. Running time: 1 hour 47 minutes.

WITH: Asher Book (Marco), Kristy Flores (Rosie), Paul Iacono (Neil), Paul McGill (Kevin), Naturi Naughton (Denise), Kay Panabaker (Jenny), Kherington Payne (Alice), Collins Pennie (Malik), Walter Perez (Victor), Anna Maria Perez de Tagle (Joy), Debbie Allen (Angela Simms), Charles S. Dutton (James Dowd), Kelsey Grammer (Martin Cranston), Megan Mullally (Fran Rowan) and Bebe Neuwirth (Lynn Kraft).

Iran test-fires missiles amid nuclear tension

By Fredrik Dahl and Hossein Jaseb

TEHRAN (Reuters) - Iran test-fired missiles on Sunday to show it was prepared to head off any military threat, four days before the Islamic Republic is due to hold rare talks with world powers worried about its nuclear ambitions.

The missile manoeuvres coincide with escalating tension in Iran's nuclear row with the West, after last week's disclosure by Tehran that it is building a second uranium enrichment plant.

News of the nuclear facility south of Iran added a sense of urgency to a crucial meeting in Geneva on Thursday between Iranian officials and representatives of six major powers, including the United States.

An Iranian official warned "fabricated Western clamour" over the new plant would negatively affect the talks at which the six powers want Iran to agree to open its facilities to inspection to prove its programme is for power and not nuclear weapons.

Ali Asghar Soltanieh, Iran's IAEA envoy, said, referring to the six powers' concern over the new plant: "This Western approach will have a negative impact on Iran's negotiations with the 5+1 countries."

U.S. President Barack Obama said on Saturday the discovery of the secret nuclear plant in Iran showed a "disturbing pattern" of evasion by Tehran that added urgency to its talks on Thursday with world powers.

Obama warned Iran on Friday it would face "sanctions that bite" if it did not come clean.

Earlier this month, Obama dropped a Bush-era plan to deploy missiles in Poland that had been proposed as a shield amid concerns Iran was trying to develop nuclear warheads it could mount on long-range missiles.
ran's missile firepower "gives us the possibility to confront every kind of threat with a long-lasting defence deterrence," Iranian General Hossein Salami said on Sunday.

"The message of this manoeuvre is for some domineering countries whose intention is to create fear, to say that we are able to come up with an appropriate response to their enmity with high speed and precision," Salami, head of the Guards' air force, said on the Guards' website.

Iran conducts war games or tests weapons to show its determination to counter attack by foes such as Israel or the United States.

The Revolutionary Guards launched at least two different types of short-range missiles on the exercise's first day and also tested a multiple missile launcher, Iranian media said.

State radio said the Guards on Monday would test-fire the Shahab 3 missile, which Iranian officials say has a range of around 2,000 km, potentially putting Israel and U.S. bases in the Gulf within reach. It was last tested in mid-2008.


State television showed footage of missiles soaring into the sky in desert-like terrain, leaving vapour trails.

English-language Press TV said the weapons tested on Sunday included a ground-to-ground missile and a naval missile, naming them as Fateh
The United States, which suspects Iran is seeking to build nuclear bombs, has previously expressed concern about Tehran's missile programme. Iran says its nuclear work is solely for peaceful power generation purposes.

Neither the United States nor its ally Israel have ruled out military action if diplomacy fails to resolve the nuclear row.

Iran has said it would respond to any attack by targeting U.S. interests in the region and Israel, as well as closing the Strait of Hormuz, a vital route for world oil supplies.

Iran acknowledged the existence of the enrichment plant near the holy city of Qom for the first time on Monday to the International Atomic Energy Agency, the U.N. nuclear watchdog.

U.S. officials said the disclosure was designed to pre-empt an announcement by Western governments, which were aware of the site, but Iranian President Mahmoud Ahmadinejad said the plant was legal and open for inspection by the IAEA.

A senior U.S. administration official said the six powers were preparing "a set of transparency demands" focussed on the uranium enrichment plant near Qom.

"Those demands include unfettered access for the IAEA to the Qom facility, the people working there, and timelines related to its development," the official said.

Turkish Prime Minister Tayyip Erdogan said on Saturday he would discuss Iran's nuclear plans with Ahmadinejad in Tehran next month, but urged caution over new sanctions.

He said any attempt to impose sanctions on Tehran's gas industry, Iran has the world's second largest natural gas reserves, would be problematic for its neighbour Turkey.