The government on Tuesday urged a state-backed consortium of Japanese firms to delay signing a contract on an Iranian oil development project, citing international suspicion that Tehran is developing nuclear weapons.

Chief Cabinet Secretary Yasuo Fukuda said Japan will not go ahead with the contract until it is clear that Iran is not developing nuclear weapons.

The proliferation of nuclear weapons is a major concern for Japan as the nation also fears North Korea is developing nuclear arms, Fukuda told a regular news conference.

Fukuda added that Japan will continue to closely monitor the situation before making a final decision.

His remarks came as Washington steps up pressure on Japan to withdraw from the project to develop the Azadegan oil field in western Iran. The U.S. pressure is part of efforts to persuade Tehran to abandon any nuclear ambitions.

“Given recent revelations about Iran’s nuclear programs and efforts being made through the International Atomic Energy Agency to deal with the threat Iran poses, this would be a particularly unfortunate time to go forward with major new oil and gas deals,” U.S. State Department spokesman Richard Boucher told a news conference in Washington on Monday.

Washington has also been accusing Iran, which President George W. Bush said is part of an “axis of evil,” of supporting terrorist organizations. and meddling in the affairs of neighboring Iraq.

The project would develop part of Azadegan, one of the largest oil fields in Iran with an estimated 26 billion barrels in oil reserves.

In July 2001, trade minister Takeo Hiranuma and Iranian President Mohammad Khatami agreed to work together toward the conclusion of a contract allowing a consortium of Japanese firms to develop the Azadegan field.

The accord was reached as Hiranuma and Khatami called for wider participation by Japanese concerns in Iran’s energy development. Japan has hoped that the oil project could secure a new source of energy to help make up for the loss of rights to the Khafji oil field in Saudi Arabia in 2000.

The Japanese firms, including Tomen Corp., Inpex Corp. and Japan Petroleum Exploration Co., had planned to ink a deal with an Iranian state-run company by the end of June.

A senior Foreign Ministry official who declined to be named confirmed that the U.S. has urged Japan to withdraw from the project.

“It may not be a good idea to step on the gas pedal and the brake pedal at the same time,” he said, noting that the international community will need to send consistent signals to Iran on the nuclear issue.

But Hiranuma, who secured preferential negotiating rights on the Azadegan field when he met with Iranian Oil Minister Bijan Zanganeh in November 2000, said it is too early to decide on the fate of the project.

“(The deal) has been negotiated by private-sector firms,” he told reporters. “I know the Japanese-U.S. relationship is important . . . (but) I want the U.S. to understand that we have been in negotiations since 2000.”

Hiranuma added he would like to hear what the U.S. has to say about the issue and consult with other members of the Cabinet before making a final decision.

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