The war between Iran and Iraq has enabled France to postpone completion of a controversial deal with Iraq to replace a French-built nuclear research reactor near Baghdad that was destroyed by an Israeli air raid in 1981, according to informed sources here.
French officials confirmed that Iraq, in an effort to expedite the agreement, has accepted stringent technical conditions set by France, including the use of low-grade uranium to fuel the reactor once it is in operation.
In Washington last week, Iraqi Deputy Prime Minister Tariq Aziz told The Washington Post that France and Iraq were "almost finalizing" replacement of the reactor, which Israel claimed was being used to make nuclear weapons. Aziz has been closely involved in negotiations between his country and France on the subject.
The issue of replacing the reactor is a sensitive one here at a time when President Francois Mitterrand has been attempting to improve relations with Iraq's chief Arab foe, Syria, and is about to receive a visit from Israeli Prime Minister Shimon Peres. The Israeli government has warned that any attempt to rebuild the reactor, which was destroyed less than a month after the Socialists came to power in France, could provoke another Israeli bombing raid.
Under Mitterrand, France has taken a somewhat more sympathetic line toward Israel than previous governments and has sought to tighten controls on the proliferation of nuclear technology. The Socialist government also has been anxious, however, to maintain France's privileged political and commercial ties with Iraq, its most important commercial partner in the Middle East.
After the Israeli raid on the reactor, which killed a French technician, Mitterrand said that France would help Iraq rebuild the facility. But despite constant prodding from Baghdad, negotiations proceeded slowly, with France setting tough conditions.
Questioned about Aziz's assessment that the issue was almost "finalized," a senior French government official said there had been no major development in negotiations with Iraq on the nuclear reactor for some months. He mentioned the war with Iran as an obstacle to a final agreement.
The official added that Iraq had accepted various conditions posed by France, including the use of a low-grade fuel known as "caramel." The fuel, which takes the form of small brown squares resembling caramel candy, functions at up to a 10 percent enrichment level, much lower than the 80 percent enriched uranium used in the original reactor.
In Washington, Aziz said Iraq was prepared to accept any type of fuel that would make the reactor work. He was in Washington to reopen diplomatic relations between his country and the United States, broken by Iraq at the time of the 1967 Middle East war.
The level of enriched uranium needed to develop a nuclear weapon is a subject of controversy. Some French nuclear scientists insist that a 20 percent enrichment level is necessary for weapons production, but others say caramel could be used to make a weapons-grade fuel if a layer of natural uranium was added.
Both France and Iraq have rejected Israeli claims that the facility was being used to make nuclear bombs.
Another French source with knowledge of the present state of the negotiations said he understood that the technical and political problems in replacing the reactor had been overcome but that the French government was waiting until the end of hostilities in the Persian Gulf before giving the go-ahead for negotiation of a contract.
"There are two separate phases," he said. "The first is the political negotiation between governments. The second is the commercial negotiations. The first phase may be almost completed, but the second has not even begun yet."
Another French condition for the replacement of the reactor that Iraq appears to have accepted is a continuing French presence at the facility. The French government hopes this will go some way toward easing Israel concerns about possible misuse of the reactor.
French sources said they expected that Saudi Arabia, which has supported Iraq in its war with Iran, would play a significant role in helping to finance the project.