* Six powers, Iran start three-day talks in Vienna on
* Meeting marks crucial phase of nuclear diplomacy
* Substantial gaps remain but sides hope for deal by July 20
* U.S. official cautions against excessive optimism
By Louis Charbonneau and Justyna Pawlak
VIENNA, May 14 Six world powers and Iran launch
the decisive phase of diplomacy over Tehran's nuclear work
during three-day talks starting in Vienna on Wednesday, with the
aim of resolving their decade-old dispute by July 20 despite
scepticism a deal is possible.
After three months of broad discussions about expectations
rather than possible compromises, the sides now plan to start
drafting the text of a final accord that could put an end to
years of hostility and mistrust and curtail the risk of a new
war in the Middle East.
In the next two months, the six powers - the United States,
Russia, China, France, Britain and Germany - want Iran to agree
to dramatically cut back its nuclear work, which they fear has
the aim of producing weapons, while Iran wants them to eliminate
devastating economic sanctions.
Diplomats from both sides have said they want to resolve all
sticking points about issues such as Iran's capacity to enrich
uranium and the future of its nuclear facilities, as well as the
timeline of sanctions relief, by the middle of July.
After that, an interim deal they struck last November
expires and its extension would likely complicate talks.
A senior U.S. official has warned about excessive optimism.
"Quite frankly, this is very, very difficult," the official
told reporters on Tuesday, speaking on condition of anonymity.
"I would caution people that just because we will be
drafting it certainly does not mean an agreement is imminent or
that we are certain to eventually get to a resolution."
Broadly, the six powers want to ensure the Iranian programme
is curtailed enough so that it would take Iran a long time to
assemble nuclear bomb components if it chose to do so. The
Islamic Republic denies having such intentions.
Central to this will be the number of centrifuges, which
potentially can enrich uranium to bomb-fuel quality, that will
be acceptable to remain in Iran.
Tehran has about 10,000 of the machines operating but the
West will likely want that number cut to the low thousands, a
demand that could be unacceptable to Iranian negotiators.
Iran's research and development of new nuclear technologies
and the amount of stockpiled enriched uranium it can keep will
also be crucial.
Enriched uranium can be used as fuel in nuclear power plants
or in weapons if purified to a high enough level.
"OUT OF CONTROL"
Diplomats have signalled some progress may have been made
during three rounds of talks since February on one of the
thorniest issues - the future of Iran's planned Arak heavy-water
reactor, which Western states worry could prove a source of
plutonium for nuclear bombs once operational.
But the U.S. official cautioned that some media reports
about progress reached up until now were going too far.
"I've read a lot of the optimism you've written," the
official said. "It's gotten way out of control."
Other diplomats from the six powers warned that progress, if
any, in the coming talks will be slow. And any agreement may
come only at the 11th hour.
"It's very difficult to say how it will all work in practice
now. We have no agenda but that's not different from any other
meeting," said one.
"The figures will come at the end. They will be part of the
big bargaining," he said, referring to decisions about issues
such the number of centrifuges to remain in Iran.
Much of the complexity of the final agreement stems from the
fact that its various elements are closely linked. A higher
number of centrifuges left in Iran would mean the six powers
wanting Tehran to more substantially slow down enrichment of
uranium to low levels, for example.
"All the parameters are interdependent," one diplomat said.
Politically, any deal could still be torpedoed by hardliners
in the United States or Iran, and talks could be complicated by
the upcoming U.S. midterm congressional elections.
Iran joined talks on its nuclear dispute with big powers -
coordinated by European Union foreign policy chief Catherine
Ashton - after President Hassan Rouhani was elected last June.
(Additional reporting by Fredrik Dahl and Parisa Hafezi in
Vienna; Editing by Eric Walsh)