The plan was to take five weeks of vacation far away from the Beltway politics of Washington, undisturbed by wars and crises. But no sooner had George W. Bush retired to his Crawford ranch to take the longest break a United States president has taken in 36 years, than his Texan idyll was disturbed by the escalation of the international dispute over Iran's nuclear ambitions.

As the world watched, workers at Iran's Isfahan nuclear plant last week began opening vats filled with yellow powder. "Yellow cake," as the sand-like uranium concentrate is often called, is at the heart of the Islamic republic's dream of becoming a superpower. Once the powder has become enriched as nuclear fuel, it can be used to power civilian nuclear plants. Or it can be used in the construction of nuclear weapons.

Moreover, the technicians removed seals the International Atomic Energy Agency (IAEA) had placed on equipment that can be used in uranium conversion. "Iran nuclear heart has started beating," Tehran's newspapers declared once the conversion plant went back into operation.

The provocative gesture, praised as "great moment for the Iranian people" by Mohammed Saeedi, deputy head of Iran's Atomic Energy Organization, has transformed the saga over Iran's nuclear ambitions, which has been cooking for months, into a profound international confrontation.

The dramatic shift in policy by the mullah-ruled state poses a challenge not only to the United States, but also to the Europeans, who have been both compromised and disgraced in their efforts to seek a deal with Tehran. Just two years ago, the foreign ministers of France, Germany and Great Britain flew to Tehran with the sole purpose of convincing the mullahs to back away from their plans to enrich uranium. Last November, the so-called European Union troika managed to convince Tehran to temporarily suspend its uranium conversion and enrichment program. The deal was viewed as proof of Europe's efforts in "soft diplomacy" and it was also intended as a hint to less-tolerant American neoconservatives for how they might become better negotiators on the world stage.

At least that seemed to be the case until last week. Humbled by the unilateral Iranian step, the EU trio is now complaining about the "flagrant violation" of the "Paris accord," which mandated the suspension of all activities associated with the enrichment of uranium. Even Russia, closely tied to Iran through lucrative nuclear projects like the construction of the Bushehr power plant, has pressed hard for a suspension of the uranium conversion.

Meanwhile, the 35 member country delegates of the IAEA governing body who had rushed to Vienna for an emergency session and who by charter are condemned to unanimity, clashed on the issue of how to convince Iran to change its course. The US, whose delegate branded the breaking of the seal as "new proof of Iran's contempt for the international concerns," advocated the creation of a resolution against Iran which included a written threat of UN sanctions. However, delegates from other countries, led by Brazil, Argentina and South Africa, instead made it clear that they preferred that "special restrictions" be placed on Iran's civilian nuclear programs.

The debate infuriated Iran's newly elected president, Mahmoud Ahmadinejad, who denied that his country had violated international accords. The statement came just after his country rejected a new deal that had been hastily patched together by the EU -- allegedly because it lacked American security guarantees. The hardliner accused the Europeans of "treading on the inalienable rights of the Iranians."

"All we want to do is to produce uranium fuel"

In fact, with the resumption of uranium conversion, Tehran hasn't broken with international law. Iran's only obligation to the IAEA, as a signatory to the nuclear Non-Proliferation Treaty, is to open its nuclear plants up to the watchdog's inspectors. However, Iran has violated the agreement in the past, seeding mistrust and forcing the UN body to install surveillance cameras at the Isfahan plant in December 2003.

Cyrus Nasseri, Iran's chief negotiator at the IAEA talks, insisted there was no reason for concern. "All we want to do is to produce uranium fuel," he said, "we will not use it for any other purpose."

But doubts persist. Iran's first nuclear reactor isn't scheduled to go online before the end of the year. And in a country so rich in oil and natural gas, it would make little sense for Iran to enrich uranium and produce fuel rods for a single nuclear reactor.

Nor did the IAEA delegates in Vienna lack the political imagination or technical expertise needed to defuse the conflict. South Africa, for example, offered to enrich Iranian uranium in its own country and to dispose of spent fuel rods -- a suggestion that was neither applauded by the European nor the Iranian delegates.

The compromise that resulted from marathon meetings of the IAEA's board of governors were as stale as a flat Coke. In a resolution, it aired its "deep concern" and mandated an "urgent suspension" of the nuclear program. IAEA director Mohamed ElBaradei has been given until beginning of September to hand in a "comprehensive report" on the inspection of Iranian nuclear plants. Addressing the mullahs' unilateral action to reinstitute the Iranian uranium enrichment program, ElBaradei said: "I hope that it's a hiccup in the process and not a permanent rupture."

In reality, the confrontation has merely been postponed by the collapse of negotiations. Tehran has rejected the IAEA's resolution as "unacceptable."

"Iran will not bend," Iran's chief representative at the IAEA talks said. "Iran will be a nuclear fuel producer and supplier within a decade."

In the US, such statements raise doubts about Iran's credibility. The newsmagazine Newsweek runs a story in its current issue with the headline, "Iran's nuclear lies," which outlines a "history of deception." Within the US administration, map exercises of potential military operations -- like the bombings of selected nuclear facilities -- have been circulating for a while.

Commenting on Iran's intentions when he stepped in front of the cameras at his ranch, Bush said he was "deeply suspicious" of Tehran's activities and threatened Iran with action at the Security Council as well as with new economic sanctions. Although the US president praised the IAEA resolutions as a "positive first step," he didn't leave any doubt about his skepticism of the intentions of the mullah regime.