Iran, world powers work out details of nuclear talks in Vienna
* World powers and Iran work on nitty-gritty of nuclear talks
* Talks in Vienna go into second day
* Final settlement in atom dispute elusive for now
VIENNA, Feb 19 (Reuters) - Six world powers and Iran started a second day of talks in Vienna on Wednesday on Tehran's contested nuclear programme, seeking to close a vast gap in expectations about what a final agreement should look like.
The meeting, which began on Tuesday, aims to set out a broad agenda for talks that could in time produce an agreement on the permissible scope of Iran's nuclear activities and lay to rest Western concerns about their possible military dimension.
The negotiations, likely to extend over several months, could help defuse years of hostility between energy-exporting Iran and the West, ease the danger of a new war in the Middle East, transform the regional power balance and open up major business opportunities for Western firms.
Western diplomats said Tuesday's talks were "productive" and "substantive" but had led to no immediate agreements.
"The focus on was the parameters and the process of negotiations, the timetable of what is going to be a medium- to long-term process," one European diplomat said. "We don't expect instant results."
On Wednesday a morning session was chaired by a senior EU diplomat, Helga Schmid, and Iranian Deputy Foreign Minister Abbas Araqchi, accompanied by senior diplomats from the six powers - the United States, Russia, China, France, Britain and Germany. It was unclear whether talks would continue into Thursday.
Araqchi was cited by Iran's English-language Press TV state television on Tuesday saying that dismantling of the country's nuclear facilities would not be part of the negotiating agenda, highlighting a key sticking point in the talks.
The six powers - the United States, Russia, China, France, Britain and Germany - have yet to spell out their precise demands. But Western officials have made clear they want Iran to cap its enrichment of uranium to low fissile purity, limit research and development of new installations and decommission a substantial portion of its centrifuges used to enrich uranium.
Such steps, they believe, would help extend the time that Iran would need to produce enough fissile material for a bomb.
LENGTHY PROCESS AHEAD
During a decade of on-and-off dialogue with world powers, Iran has rejected their allegations that it is seeking a nuclear weapons capability. It says it is enriching uranium only for electricity generation and medical purposes.
As part of a final deal, Iran expects the United States, the European Union and the United Nations to lift painful economic sanctions, but western governments will be wary of giving up their leverage too soon.
Ahead of the talks, a senior U.S. official said getting to a deal would be a "complicated, difficult and lengthy process".
"When the stakes are this high, and the devil is truly in the details, one has to take the time required to ensure the confidence of the international community in the result," the official said. "That can't be done in a day, a week, or even a month in this situation."
On the eve of the talks both sides played down expectations, with Iran's Supreme Leader Ayatollah Ali Khamenei saying he was not optimistic.
The six powers hope to get a deal done by late July, when an interim accord struck in November expires.
That agreement, made possible by the election of relative moderate President Hassan Rouhani on a platform of ending Iran's international isolation, obliged Tehran to suspend its most sensitive atom work in return for some relief from economic sanctions.
Iranian Foreign Minister Mohammad Javad Zarif, also quoted by Press TV on Tuesday, sounded an optimistic note:
"It is really possible to make an agreement because of a simple overriding fact and that is that we have no other option". (Additional reporting by Parisa Hafezi and Louis Charbonneau in Vienna; Editing by Jon Boyle)
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