Iran nuclear talks avoid collapse

ISTANBUL (Reuters) - Talks between Iran and world powers seeking to persuade the Islamic Republic to curb its nuclear program came close to collapse on Friday, but would resume on Saturday, a western official said.

EU foreign policy chief Catherine Ashton convinced the Iranian delegation to remain at the talks, which will go into a second day on Saturday with little prospect of concrete progress beyond entrenched positions in the eight-year-old dispute.

The West suspects Iran plans to develop a nuclear weapon but Tehran insists its atomic energy program is peaceful and that it has a right to enrich uranium to power its nuclear reactors.

"We had been preparing for the possibility of a potential collapse," the western diplomat said, crediting the tough line taken by Ashton and the unity of the six powers.

"She seems to have managed to hold the position and convince the Iranians to stay at the table."

The six big powers dealing with Iran via Ashton are the United States, Britain, France, Russia, China and Germany.

Earlier, state-run Iranian television reported that the outcome of the meeting between Iran's nuclear negotiator Saeed Jalili and China could prove crucial to the continuation of the talks.

Iran's semi-official Fars news agency quoted an Iranian delegate saying the talks had been "good and constructive."

Negotiators had gone into the Istanbul meeting with low expectations, and prospects were not enhanced when an aide to Jalili drew a red line round its enrichment activities during the meeting.

"We will not allow any talks linked to freezing or suspending Iran's enrichment activities to be discussed at the meeting in Istanbul," Abolfazl Zohrevand told reporters.

Uranium enriched to a low degree yields fuel for electricity or, if refined to a very high level, the fissile core of a nuclear bomb.

U.S. MEETING

Uncertainty over whether Iran would agree to a bilateral meeting between Jalili and a U.S. delegation led by Under-Secretary for Political Affairs Bill Burns added to the gloom. The two men had met on the sidelines of an earlier round of talks in Geneva in 2009.

"We are fully prepared to have a conversation with Iran, but whether it will happen remains to be seen," U.S. State Department spokesman P.J. Crowley said in Washington.

Such contacts have been rarely confirmed by the Iranian side and have usually taken place behind the scenes since the fall of the U.S.-backed shah in Iran in 1979.

Iran's nuclear standoff with the West has escalated in the past year, with the United Nations imposing new sanctions and Western states rejecting a revised proposal for Iran to swap some of its fuel abroad as too little, too late.

Iran has ignored Security Council resolutions demanding it suspend enrichment, with trade and other benefits offered in return, and refused to grant unfettered access for U.N. nuclear inspectors.

BACK TO OLD OFFERS

Impatient with what some analysts have called Iran's zigzag diplomacy, the powers are looking for a clear sign from Tehran that it is ready to engage in a way that helps engender trust, even if there is no substantive progress.

"It remains to be seen whether Iran will commit itself to a lengthy process and answer the questions that the international community has about its nuclear programs," Crowley said.

During their hour and a half meeting, Ashton and Jalili restated their positions and no progress was made.

"We robustly put forward where we would like to go in this process," said the diplomat. "We're just stuck at the issue of how to get into the details."

Ashton outlined a possible revised offer for a nuclear fuel swap that would entail Iran handing over a large chunk of its stockpile of low enriched uranium (LEU). But no offer was made as Iran's preconditions included a suspension of economic sanctions, the diplomat said.

In their search for an opening, the powers are prepared to revise 2009 proposals for a nuclear fuel swap, whereby Iran would exchange some of its LEU for highly processed fuel to keep a Tehran reactor that makes medical isotopes running.

But it would have to involve a larger quantity of LEU than earlier envisaged, as Iran's reserve has grown since then.

The goal, for the six powers, was to divest Iran of enough LEU to delay it accumulating enough for a nuclear weapon while negotiations proceeded on a broader solution to the crisis.

The prospect of an Iranian atom bomb fans fears of a broader Middle East conflict should the United States or Israel opt to attack it, a mooted last-ditch option should diplomacy fail.

(Additional reporting Fredrik Dahl; writing by Simon Cameron-Moore; editing by Jon Boyle)