Iran, Big Powers to Trade Offers at Nuclear Talks

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February 27, 2013 3:58 AM EST

Major powers on Tuesday offered Iranlimited sanctions relief in return for a halt to the most controversial part of its nuclear program, and Iran promised to respond with a proposal on the same scale.

The talks in Kazakhstan were the first in eight months between Iran and the five permanent members of the U.N. Security Council plus Germany - the "P5+1" - on a decade-old dispute that threatens to trigger another war in the Middle East.

Iran has used the time since the last meeting in June to further expand activity that the West suspects is aimed at enabling it to build a nuclear bomb, something that Israel has suggested it will prevent by force if diplomacy fails.

The two-day negotiations in the city of Almaty follow inconclusive meetings last year in Istanbul, Baghdad and Moscow.

U.S. Secretary of State John Kerry said in Berlin that he hoped Iran "will make its choice to move down the path of a diplomatic solution".

A Western official who declined to be named said the talks had been "useful" and confirmed they would continue on Wednesday as scheduled.

But with the Islamic Republic's political elite preoccupied with worsening infighting before a presidential election in June, few believe the meeting will yield a quick breakthrough.

"It is clear that nobody expects to come from Almaty with a fully done deal," said a spokesman for the European Union's foreign policy chief Catherine Ashton, who oversees contacts with Iran on behalf of world powers.

OFFER PRESENTED

A U.S. official said on Monday that the powers' offer to Iran - an updated version of one rejected by Iran last year - would take into account its recent nuclear advances, but also take "some steps in the sanctions arena".

This would address some of Iran's concerns but not meet its demand that all sanctions be lifted, the official said.

A Western official later said the powers had formally presented the offer during Tuesday's talks but gave no details.

In Almaty, a source close to the Iranian negotiators told reporters: "Depending on what proposal we receive from the other side we will present our own proposal of the same weight. The continuation of talks depends on how this exchange of proposals goes forward."

Iranian media also said the talks would continue, without saying whether the Iranian proposal had been presented.

At best, diplomats and analysts say, Iran will take the joint offer from the United States, Russia, France, Germany, Britain and China seriously and agree to hold further talks soon on practical steps to ease the tension.

"We are looking for flexibility from the Iranians," said Ashton's spokesman, Michael Mann.

But Iran, whose chief negotiator Saeed Jalili is close to Supreme Leader Ayatollah Ali Khamenei and is a veteran of Iran's 1980s war against Iraq and the Western powers that backed it, has shown no sign of willingness to scale back its nuclear work.

It argues that has a sovereign right to carry out nuclear enrichment for peaceful energy purposes, and in particular refuses to close its underground Fordow enrichment plant, a condition the powers have set for any sanctions relief.

FASTER ENRICHMENT

A U.N. nuclear watchdog report last week said Iran was for the first time installing advanced centrifuges that would allow it to significantly speed up its enrichment of uranium, which can have both civilian and military purposes.

Tightening Western sanctions on Iran over the last 14 months are hurting Iran's economy and slashing oil revenue. Its currency has more than halved in value, which in turn has pushed up inflation.

The central bank governor was quoted on Monday as saying Iran's inflation was likely to top 30 percent in coming weeks as the sanctions contribute to shortages and stockpiling.

But analysts say the sanctions are not close to having the crippling effect envisaged by Washington and - so far at least - they have not prompted a change in Iran's nuclear course.

Western officials said the powers' offer would include an easing of restrictions on trade in gold and other precious metals if Tehran closes Fordow.

The facility is used for enriching uranium to 20 percent fissile purity, a short technical step from weapons-grade.

The web-based news site Al Monitor said on Tuesday that the big powers' offer could also include some relief for the petrochemical industry and in banking. Officials present in Almaty declined to comment on the report.

The stakes are high with Israel, assumed to be the only nuclear-armed power in the Middle East, hinting strongly at military action and Iran pledging to hit back hard if attacked.

Western officials acknowledge an easing of U.S. and European sanctions on trade in gold represents a relatively modest step. But gold could be used as part of barter transactions that might allow Iran to circumvent financial sanctions.

Iran's Foreign Ministry spokesman last week dismissed the reported incentive as insufficient and a senior Iranian lawmaker has ruled out closing Fordow, close to the holy city of Qom.

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