Faltering Iran talks to resume, deal possible: IAEA

EDITORS' NOTE: Reuters and other foreign media are subject to Iranian restrictions on their ability to film or take pictures in Tehran. Iran's Foreign Minister Manouchehr Mottaki speaks during a news conference in Tehran October 20, 2009. Iran will never abandon its ''legal and obvious'' right to nuclear technology, Mottaki said on Tuesday, adding that Tehran had no plan to halt its disputed uranium enrichment work.

VIENNA (Reuters) - High-stakes talks between Iran and big powers that stalled Tuesday will resume Wednesday and the U.N. nuclear watchdog chief said a deal was still in reach to help allay concerns about Tehran's nuclear program.

The multilateral talks, which began Monday, faltered after Iran said it would not agree to curb uranium enrichment, something seen by the powers as essential to make any accord work, and warned France could not be part of a deal.

"I believe we are making progress. It is maybe slower than I expected. But we are moving forward and we are going to meet tomorrow at 10 a.m. (0800 GMT/4 a.m. EDT)," International Atomic Energy Agency chief Mohamed ElBaradei told reporters.

ElBaradei said the day was spent in separate bilateral consultations involving Iran, France, Russia and the United States and he believed a deal was still attainable.

"We still hope to be able to reach an agreement. It's a complex process... There (are) many technical issues we have to analyze. There is of course a question of confidence-building guarantees," he said, apparently referring to Iran.

The negotiations, presided over by ElBaradei, offered the first chance to build on a tentative agreement reached on October 1 to defuse a long standoff over fears Iran's stockpiling of enriched uranium is a latent quest to develop atomic bombs.

At those talks in Geneva, Western diplomats said, Iran agreed in principle to send most of its low-enriched uranium to Russia and France for further refinement. This would be converted into fuel rods to replenish dwindling fuel stocks of a Tehran reactor that makes radio-isotopes for cancer care.

"The (consultations) have been constructive and the meeting with all countries concerned will continue tomorrow," Iran's IAEA ambassador, Ali Asghar Soltanieh, told reporters.

U.S. and Iranian delegates met under ElBaradei's auspices in a bid "to move forward" toward agreement, U.S. National Security Council spokesman Mike Hammer said. He did not say what was discussed.

The main, multilateral gathering did not resume Tuesday after Tehran suddenly refused to deal directly with France.

Iranian Foreign Minister Manouchehr Mottaki and other officials in Tehran accused Paris of reneging on contracts to deliver nuclear materials in the past.

FACE-SAVING COMPROMISE

Diplomats familiar with the talks said the parties were considering a face-saving compromise drafted by the IAEA. Under this, Iran would sign a contract with Russia which would then would sub-contract further work to France.

Other tough issues to settle included how much low-enriched uranium (LEU) Iran would send out, and when. The powers wanted this to be 75 percent of its declared stockpile, and to be shipped abroad in one consignment before the end of the year.

Iran had hesitated to address such details in Vienna, Western diplomats said, raising concerns it could be backing out of the tentative deal, or playing for time. The three powers were seeking to clinch an accord before the end of this week.

The West hopes that farming out a large amount of Iran's LEU reserve for reprocessing into fuel for the medical isotope reactor -- using technology Iran lacks -- will minimize the risk of Iran refining the material to high purity suitable for bombs.

Western diplomats say Tehran must ultimately curb the program to dispel fears of a growing LEU stockpile being further enriched, covertly, to produce nuclear weapons.

But Mottaki said Iran would not curtail enrichment as part of any LEU deal. "Iran will continue its uranium enrichment. It is not linked to buying fuel from abroad," he said.

"The meetings with world powers and their behavior shows that Iran's right to have peaceful nuclear technology has been accepted by them. Iran will never abandon its legal and obvious right," he said, alluding to unheeded U.N. Security Council resolutions since 2006 demanding that Tehran suspend enrichment.

LEU is used as fuel for nuclear reactors, while a nuclear bomb requires highly enriched uranium. The West fears Iran's declared civilian nuclear energy program is a front for producing fissile material for atomic bombs. Iran denies this.

Mottaki said Iran did not need France for the deal. "There are Russia, America ... I believe these countries are enough."

Iran won a reprieve from harsher sanctions by agreeing on October 1 to IAEA inspections of a hitherto hidden enrichment site and to sending low-enriched uranium abroad for conversion.

(Additional reporting by Sylvia Westall in Vienna and Parisa Hafezi in Tehran; Editing by Matthew Jones)