US presses Iran, Obama signals openness to talks
* Obama holds unusual round-table with U.S. journalists
* Obama comments balance pressure with diplomacy
* Iran backing militants in Iran, Iraq, Lebanon - U.S.
By Ross Colvin
WASHINGTON, Aug 5 (Reuters) - The United States declared Iran the biggest state sponsor of terrorism on Thursday, ratcheting up pressure on its long-time foe even as President Barack Obama signaled he was still open to talking to Tehran about its nuclear program.
Iran provided financial, material and logistic support for terrorist and militant groups throughout the Middle East and Central Asia, the U.S. State Department said in its annual "Country Reports on Terrorism" publication.
The report said Tehran had provided funding and support to militant groups in Lebanon, Iraq and the Palestinian territories, as well as the Taliban in Afghanistan.
Its actions have had a "direct impact on international efforts to promote peace, threatened economic stability in the Gulf and undermined the growth of democracy," the report said.
Since June, the U.N. Security Council, the United States and the European Union have tightened sanctions on Iran over its refusal to enter into international talks on its nuclear program, which Washington fears is a cover to build an atomic bomb, but Tehran says is for the generation of electricity.
The Obama administration believes there are some small signs that the tougher sanctions are beginning to have an effect, a senior administration official told Reuters, although he acknowledged that it was hard to quantify.
The administration says the sanctions are designed to force Tehran to return to international nuclear talks, and in a briefing with a group of U.S. columnists and TV news show anchors at the White House, Obama reaffirmed the door was still open to negotiations.
"It is very important to put before the Iranians a clear set of steps that we would consider sufficient to show that they are not pursuing nuclear weapons," he told the journalists on Wednesday, the Washington Post reported.
The White House declined to make a full transcript of the briefing available.
STICKS AND CARROTS
Iran expert Suzanne Maloney said Obama's comments in the unusual forum may have been intended to send a subtle reminder to Iran that the increased pressure it faces is balanced by the standing offer of engagement.
"I think it is a rightful concern that there can be an unintended backlash to too much pressure from the Iranian side," said Maloney, author of "Iran's Long Reach: Iran as a Pivotal State in the Muslim World."
A senior administration official said Obama was simply reiterating U.S. policy toward Iran and was not laying out a new "master plan".
Asked about Obama's reference to the steps Iran must take to satisfy concerns about its nuclear ambitions, the official said these should be agreed in the "P5+1" forum that groups the United States with Russia, China, Britain, Germany and France.
"As sanctions tighten and have more of a bite, Iran has a choice which it can make at any time to decide to enter into discussions ... on how it will demonstrate its program is for peaceful intent," the official said.
Maloney said Iran's leaders, faced with growing internal pressures and an economic crisis, would likely agree to talks soon, although she expected them to be only "briefly productive."
Iranian Foreign Minister Manouchehr Mottaki said last week Iran would be ready to hold talks with world powers after the Muslim holy month of Ramadan ends in early September.
Iran has sent a letter to the International Atomic Energy Agency saying it is ready to negotiate the exchange of 2,646 pounds (1,200 kg) of its 3 percent enriched uranium for 265 pounds (120 kg) of 20 percent enriched uranium.
Iran last met the P5+1 in Geneva in October, when they discussed Iran sending some low-enriched uranium abroad in exchange for fuel for a Tehran reactor that makes medical isotopes. (Reporting by Ross Colvin; editing by Patricia Wilson and Cynthia Osterman)
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