Heated Reactions

Hard-line Iranian President Mahmoud Ahmadinejad wasted no time in confronting the West over Tehran's nuclear ambitions. Just days after being sworn in, Ahmadinejad defended Iran's decision to break seals placed by the International Atomic Energy Agency on a facility in Isfahan, thus ending a nine-month-old voluntary moratorium on converting uranium ore into gas used in the uranium-enrichment process.

The move followed Iran's rejection of a U.S.-backed compromise proposed by Britain, France and Germany that called for Iran to give up uranium-enrichment activities — which could potentially produce fuel for an atomic weapon — in exchange for a comprehensive European economic assistance package. "It is an insult to the Iranian nation," Ahmadinejad told United Nations Secretary General Kofi Annan last week, rejecting the offer.

The 49-year-old former Tehran mayor, who has no previous experience in international diplomacy, said he would come up with a nuke initiative of his own, once he had completed his cabinet appointments. That gave a glimmer of hope to some European officials. "Obviously, things haven't moved in the direction we'd all hoped," a French diplomat told TIME, "but all options and possible outcomes remain fully open."

U.S. President George W. Bush reacted cautiously, saying "the world is coalescing" against Iran's ambitions, and wouldn't rule out sanctioning military force against the country. Analyst Karim Sadjadpour of the International Crisis Group says that Iranian officials are making good on their rhetoric to continue enrichment activities and "feel confident that with oil at $64 a barrel, the last thing the Europeans want is further sanctions on Iranian oil."