Iranian go-slow dims deal chances at Vienna atom talks

By Mark Heinrich

VIENNA (Reuters) - World powers will seek to finalize an agreement with Iran on Monday on processing its uranium abroad to help allay Western fears it is developing nuclear weapons.

But Iran has dampened Western expectations it is ready to seal the deal. "Time is on our side," a senior Iranian official said. Tehran would send junior officials rather than its nuclear energy chief to the meeting in Vienna, he told Reuters.

Iran won itself a reprieve from the threat of harsher U.N. sanctions by engaging six powers in rare high-level talks on October 1 in Geneva that opened the door to detente over its disputed nuclear program after a seven-year standoff.

Iran stuck to its refusal to curb uranium enrichment. But it made two gestures of transparency that the powers touted as a basis for further steps they say Iran should make to disprove suspicions of a clandestine agenda to develop nuclear weapons.

Iran granted U.N. inspections at a hitherto hidden uranium enrichment site, and agreed in principle to have Iranian uranium processed in Russia and France for use by a Tehran reactor that makes cancer-care isotopes but is running out of imported fuel.

Two days later, the International Atomic Energy Agency pinned down October 25 to start surveillance of the site near Qom.

The United States, Britain, France and Germany indicate they will pursue sanctions targeting Iran's vital oil sector if the diplomacy begun in Geneva does not get Iran to temper and open up its nuclear program to scrutiny by the end of this year.

Monday's technical talks in Vienna, to be shepherded by IAEA experts, will be the first chance for Iran and world powers to make good on prospects for nuclear cooperation raised in Geneva.

But the uranium proposal faces pitfalls due to differences over exactly what was agreed on October 1 and what each side wants out of the deal.

Western diplomats said Iran assented in principle to sending about 80 percent of its declared stockpile of low-enriched uranium (LEU) to Russia for further refinement, then on to France for fabrication into fuel assemblies.

The material would then be returned for use by the Tehran reactor to replace fuel, obtained from Argentina in 1993 but set to run out in about a year, in a form resistant to being enriched to a very high -- or weapons-grade -- degree.

For world powers, the deal's benefit lies in greatly cutting Iran's LEU stockpile. This has no apparent civilian use since Iran has no operating nuclear power plants, but is enough to fuel one atomic bomb, if Tehran chose to purify it further.

Iran, which says it is enriching uranium only for future electricity, would save its medical isotope production despite sanctions that make it hard for it to import nuclear materials.

"WIN-WIN DEAL?" IRAN HESITATES

Russian, French, U.S. and IAEA officials want to wrap up key terms with Iran on Monday, including a timetable and anti-proliferation guarantees once Iran recovers the material.