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VIENNA (Reuters) – The U.N. nuclear watchdog is concerned that Iran may now be working to develop a nuclear payload for a missile, the agency said in a confidential report on Thursday obtained by Reuters.

The International Atomic Energy Agency report also confirmed Iran had produced its first, small batch of uranium enriched to a higher level — 20 percent — but said the Islamic Republic had failed to give inspectors the required advance notice.

Both developments will stoke Western concerns that Iran is secretly bent on developing nuclear weapons capacity from the enrichment process. Tehran says the effort is meant only to yield electricity or radio-isotopes for agriculture or medicine.

The IAEA has been investigating for five years Western intelligence reports indicating Iran has coordinated efforts to process uranium, test explosives at high altitude and revamp a ballistic missile cone in a way suitable for a nuclear warhead.

In 2007 Washington issued an assessment saying Iran had halted such research in 2003 and probably had not resumed it.

But its key Western allies believe Iran continued the program — and the IAEA report offered independent support for that perception for the first time.

“The information available to the agency is extensive … broadly consistent and credible in terms of the technical detail, the time frame in which the activities were conducted and the people and organizations involved,” the report said.

“Altogether this raises concerns about the possible existence in Iran of past or current undisclosed activities related to the development of a nuclear payload for a missile.”

As the passage of time made it more difficult to unearth relevant information, the IAEA said it was vital for Iran to cooperate with IAEA investigators “without further delay.”

(Reporting by Mark Heinrich; Editing by Kevin Liffey)

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If the current trend continues, prepare to pay a little more at the pump when you fill up. A weak dollar, increased Chinese demand and other factors have caused the price of crude oil to rise 20 percent in the last month.

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California Republican Governor Arnold Schwarzenegger recently asked for $6.9 billion dollars in federal money to help with their struggling budget which is $19.9 billion dollars in the hole. The 2010 to 2011 budget he proposed reached $82.9 billion, and to cover the costs a federal bailout wouldn’t cover, he plans $8.5 billion in cuts and $4.5 billion in “alternative funding .”

Without the bailout, Schwarzenegger fears that they’ll have to cut 4.6 billion in state assistance and would halt tax breaks to get more funding.

Wall Street Journal:

The governor said California deserved the federal help because the state sends far more tax money to Washington than it receives in return. Federal mandates, he added, “force us to spend money that we do not have.”

The budget proposal said the federal government should reimburse California $2.8 billion for costs related to the state’s Medicaid program, as well as more than $1 billion for special-education spending and $2.1 billion in federal-stimulus money.

Mr. Schwarzenegger called the state legislature into a special budget session. He proposed cutting $2.4 billion from health and welfare spending and $1.2 billion from prison spending. He also called for cuts in salaries and pensions for state workers.

Many have predicted that California would eventually request a federal bailout for its abysmal budget, much of which is (more…)

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The New York Daily News is reporting Counterterrorism director at the NCTC, Michael Leiter,  continued his vacation on the slops after the Christmas Day crotch Bomber nearly blew up a plane destined for Detroit. One official was reported to have said “People have been grumbling that he didn’t let a little terrorism interrupt his vacation.”

The top official in charge of analyzing terror threats did not cut short his ski vacation after the underwear bomber nearly blew up an airliner on Christmas Day, the Daily News has learned.Michael Leiter, director of the National Counterterrorism Center since 2007, decided not to return to his agency’s “bat cave” nerve center in McLean, Va., until several days after Christmas, two U.S. officials said.

“People have been grumbling that he didn’t let a little terrorism interrupt his vacation,” said one of the sources.

The NCTC, the post-9/11 clearinghouse for intelligence to detect terror plots against the U.S., is under intense scrutiny for failing to “connect the dots” on Nigerian bomber Umar Farouk Abdulmutallab.

Leiter’s spokesman declined to say when the terror-center chief returned to Washington and fully retook the helm of his analysis agency, which is near CIA headquarters just outside the nation’s capital.

Whether or not cutting his vacation short and running back to his office would have made any difference in the world is up for debate, especially in light of Presdient Obama’s delayed and seemingly nonchalant reaction, it looks, to some critics,  like this administration is looking for and just found it’s fall guy to cover for their own ineptness.

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The problem that has plagued administration after administration has apparently drove the Obama administration up the wall in just over a year. Chief of Staff Rahm Emanuel reportedly said that if progress does not speed up in that region, the US would significantly reduce her involvement in the ongoing conflict. (more…)

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In a scary moment for world travelers, a man traveling into Ireland has been released from Irish custody after Slovakian authorities admitted to planting 90g of an experimental explosive with him – and he wasn’t caught. At Bratislava airport, Slovakian officials also planted explosives with 7 other traveler’s who were all detected.

From the BBC:

Irish police have released a man held over an explosives find, after Slovakian authorities admitted planting them in his luggage.

The explosive was one of eight pieces of contraband placed with unsuspecting passengers at Bratislava Airport last weekend, broadcaster RTE reported.

Airport security detected seven of the illicit items, but the eighth – 90g of research development explosive – managed to escape detection.

Slovakian police alerted their Irish counterparts on Tuesday morning, and the man’s flat near the city centre was cordoned off while bomb disposal experts removed the explosives for further examination.

The result of the Slovak’s “test” proves the potential frailty of security across the globe, especially after the Christmas Day “CrotchBomber” scare over Detroit.

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• Slovak Air Security Test Goes Very Wrong (thelede.blogs.nytimes.com)

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