Iran talks with world powers hit snag over sanctions

Iran accused world powers on Wednesday of creating "a difficult atmosphere" that hindered talks on its atomic energy programme, signalling a snag in diplomacy to defuse fears of a covert Iranian bid to develop nuclear bombs.

The nub of the dispute was not immediately clear as the Baghdad talks entered a second day. But Iran had served notice that it wanted immediate relief from economic sanctions as part of any deal to scale back uranium enrichment, whereas Western powers insisted Tehran must first rein in its activity.

Pro-government Iranian media said Tehran's negotiators were demanding a principle of "reciprocity" of concessions, which they said was not on the table in the Baghdad talks. The United States had voiced cautious hope on Wednesday that Iran was finally engaging the powers on practical, transparent ways of showing its nuclear work, marked by years of secrecy and evasions of UN inspections, would be for peaceful ends only.

European Union foreign policy chief Catherine Ashton, heading the powers' delegation in Baghdad, met her Iranian counterpart on Thursday before the full plenary session commenced, a Western diplomat said. But an Iranian delegate poured cold water on suggestions that progress towards an outline deal, seen as crucial to heading off the danger of a new Middle East war, was being made.

"What we heard in Istanbul was more interesting," he said, referring to exploratory talks that ended a 15-month diplomatic deep freeze during which the West escalated sanctions to target Iran's oil exports.

"We believe the reason (the powers) are not able to reach a result is America," the official said, asking not to be named. "(They) came to Baghdad without a clear mandate so we think the atmosphere is difficult."

A senior US official said earlier the six powers had put specific gestures to lessen sanctions pressure on the table as part of a step-by-step confidence-building process.

A Western diplomat said that one element of the offer was an easing of restrictions to exports of aircraft parts to Iran - a relatively modest step unlikely to unblock the broader standoff.

After the Iranian criticism, another diplomat at the talks said none of the six powers - the United States, Russia, China, France, Britain and Germany - were "'rolling back' on anything.

"By coming to Baghdad and putting on the table a forward-looking package, we are being pro-active, engaging and building on Istanbul.

Any negotiation on an issue like this is never going to be straightforward, but it's far too early to give a clear read-out of how things are progressing."

Under the scrutiny of nervous global oil markets and Iran's arch-enemy Israel - believed to be the only Middle East country with nuclear weapons - the two sides met for a full day on Wednesday, negotiating deep into the night. O

fficials said while there were no breakthroughs, enough evidence of "common ground" emerged to keep talking on Thursday. The US official said the dialogue revealed a "fair amount of disagreement". "But still we have to come to closure about what are the next appropriate steps."

In previous meetings, the two sides could not even agree on an agenda, with each largely repeating known positions and Tehran refusing any dialogue on changes to its nuclear path. International energy markets remain nervous, unsettled by extended Western sanctions imposed on Iran's crude exports and the spectre of a Middle East conflict arising from possible Israeli strikes on Iran's fortified nuclear installations.

The overall goal of the six countries jointly negotiating with Tehran is an Iranian agreement to curb uranium enrichment in a transparent, verifiable way to ensure it cannot be diverted to bombmaking.

The Islamic Republic's priority is to secure a swift end to sanctions isolating the country. The powers' main proposal was for Iran to halt its uranium enrichment to the higher fissile concentration of 20%. That is the Iranian nuclear advance most worrying to the West since it largely overcomes technical obstacles to reaching 90%, or bomb-grade, enrichment.

Iran, the world's No 5 oil exporter, says it is enriching uranium only for electricity to serve needs of a burgeoning population, and for a medical research reactor. It has hinted at flexibility on higher-grade enrichment, although analysts say it would be unlikely to compromise much while sanctions remain in place.

In the absence of diplomatic compromise, Iran appeared to be putting "more facts on the ground" to boost its position. A UN nuclear agency report due in the next few days is expected to show that Iran has installed more uranium enrichment centrifuges at an underground site, potentially boosting output capacity of nuclear work global powers want it to stop.

Tehran has repeatedly ruled out suspending all enrichment as called for by several UN Security Council resolutions. Iranian media said Tehran's chief negotiator, Saeed Jalili, presented its own five-point package of proposals covering a comprehensive range of nuclear and non-nuclear issues.

But a European diplomat said: "We are not quite sure what these five points are. We are trying to find out. There are no details."