France's Sarkozy warns Iran on failure of nuclear talks

PARIS (Reuters) - French President Nicolas Sarkozy told Iran on Wednesday that failure to reach a credible agreement over its nuclear program would force world powers to mobilize to protect threatened states in the region.

In an annual address to France's ambassadors, Sarkozy laid out his foreign policy objectives as the country prepares to take over the chair next year of the Group of 20 powers and the narrower club of rich countries known as the G8.

"If a credible agreement cannot be reached, Iran's isolation would only worsen," Sarkozy said. "And in the face of worsening threat, we would have to organize ourselves to protect and defend states that feel threatened."

Many of Iran's Gulf Arab neighbors are concerned about the Shi'ite state's increasing clout in the region and the prospect that it might acquire nuclear weapons.

"Everybody knows that there are serious consequences to a policy that would allow Iran to follow its nuclear path," Sarkozy said. "It would see a general proliferation in the region or even military conflict."

Iran has said it is prepared to return to talks with six world powers but the exact nature of such negotiations has yet to be defined. Supreme Leader Ayatollah Ali Khamenei has said Iran would not talk to the United States unless sanctions and military threats were lifted.

Tehran began loading fuel into its first nuclear power plant in the Gulf city of Bushehr on Saturday, a potent symbol of its growing regional sway and its rejection of international sanctions designed to prevent it building a nuclear bomb.

Sarkozy said he welcomed the new power plant to be operated by the Russians as long as it adhered to international law.

Tehran is already under four rounds of U.N. sanctions because of fears that its uranium enrichment program, which is separate from Bushehr, is aimed at developing nuclear weapons capability. Tehran insists its enrichment work is for peaceful energy only.

"I hope that we can find a good agreement in the coming months ... that Iran respects the law and that the concerns of the international community are lifted," Sarkozy said.