Iran Offers ‘Readiness’ for Nuclear Talks as It Faces Financial Isolation

Iran seeks direct negotiations about its nuclear program at the “earliest possibility,” the country’s top nuclear negotiator, Saeed Jalili, wrote in a Feb. 14 letter to Europe’s foreign policy head Catherine Ashton.

As the U.S. and European Union are evaluating the Iranian message, a bipartisan group of U.S. senators said they are “extremely concerned” that Iran will “seek to buy time” or weaken economic sanctions without giving up uranium enrichment activities that may be used to make the fuel for nuclear weapons.

Separately, the global bank-transfer messaging service known as Swift said yesterday it is preparing to expel Iranian financial institutions that are under EU sanctions. The Society for Worldwide Interbank Financial Telecommunication facilitates transactions for the global banking industry.

“If strictly implemented, this could deny Iran’s banks the ability to move billions of dollars in financial transactions, and put immense pressure on Iran’s leaders to reconsider their policies,” Mark Dubowitz, executive director of the Foundation for Defense of Democracies, a Washington policy group, said in an e-mail.

Jalili wrote Ashton that “we voice our readiness for dialogue on a spectrum of various issues which can provide ground for constructive and forward-looking cooperation,” according to a copy of the letter obtained by Bloomberg News. Talks on the nuclear issue should be approached “on step-by- step principles and reciprocity,” he said in the letter.

Next Steps

U.S. Secretary of State Hillary Clinton and Ashton said after meeting at the State Department in Washington yesterday that they and allies are reviewing the letter to determine next steps. While Ashton said she was “cautious” and “optimistic,” they didn’t publicly accept the Iranian offer for negotiations.

The European Union said Feb. 16 that it is studying the letter, which was written after almost four months in response to an Oct. 21 EU attempt to revive diplomacy. Iran hasn’t negotiated with the so-called P5+1 -- the UN Security Council’s permanent members China, France, Russia, the U.K., and the U.S. plus Germany -- since talks broke down in January 2011. The new round of talks should be held at a “mutually agreed venue,” according to the letter.

“This response from the Iranian Government is one we’ve been waiting for and, if we do proceed, it will have to be a sustained effort that can produce results,” Clinton said.

Letter Welcomed

The top U.S. diplomat welcomed the letter and described it as an important step. She said Iran has to be willing to discuss its nuclear program, “and Iran’s response to Cathy’s letter does appear to acknowledge and accept that.”

Clinton said it might take some time to formulate a response because it was crucial to maintain unity within the P5+1 on how to go forward. “It takes time to consult and to do so in a thorough manner,” she said. “So we need to give time to our partners in the P-5+1 process to do their own evaluation.”

Ashton said the P5+1 would evaluate where the members left off when the last round of talks fell apart and “where do we need to go next.”

The P5+1 needs “to be clear what it is we mean to achieve and what we’re expecting from the Iranians,” Ashton said. “And that’s what we’re in the process of doing right now.”

Senators’ Concerns

The bipartisan group of U.S. senators wrote President Barack Obama Feb. 16 to urge that sanctions be continued and toughened even if negotiations get under way. Iran’s willingness to return to talks “is most likely a direct consequence of this pressure,” they wrote.

Among lawmakers signing the letter were Democrats Robert Menendez of New Jersey, Chuck Schumer and Kirsten Gillibrand of New York, and Richard Blumenthal of Connecticut and Republicans John McCain of Arizona, Marco Rubio of Florida, and Lindsey Graham of South Carolina. Connecticut independent Joe Lieberman also signed.

“We remain extremely concerned that the Iranian government will seek to buy time or otherwise dilute the focus of our diplomacy,” the lawmakers wrote.

“We would strongly oppose any proposal that caps or limits sanctions against the Iranian regime in exchange for anything less than full, verifiable and sustained suspension of all enrichment activities, including both 3 percent and 20 percent enrichment,” they said, referring to the process that could be used to produce the 90 percent enriched uranium to fuel a nuclear bomb.

U.S.-Israel Talks

Amid U.S. concerns that Israel may initiate military action against Iran’s nuclear sites, the White House said in an e-mail that National Security Adviser Tom Donilon plans to travel to Israel from February 18 to Feb. 20 to discuss Iran and other issues, such as the turmoil in Syria. Israeli Prime Minister Benjamin Netanyahu is due in Washington to address the American Israel Public Affairs Committee during the first week of March.

UN Secretary-General Ban Ki-Moon said yesterday in Vienna that Iranian assertions that its nuclear program is peaceful are unconvincing and that it is up to the government in Tehran to dispel suspicions about its atomic work. Iran says its nuclear program is for civilian power and medical research purposes, although the U.S., Israel and other nations say they suspect Iran is seeking to acquire the capability to produce nuclear weapons.

Oil Prices

Sanctions against Iran have created the conditions for a negotiated outcome, according to a Feb. 15 New York Times op-ed article written by Dennis B. Ross, who served two years on the National Security Council staff as President Barack Obama’s special assistant on Iran.

Oil may rise next week on concern that shipments will be disrupted as tension between Iran and the West over the country’s nuclear program increases, a Bloomberg News survey showed.

Fifteen of 37 analysts, or 41 percent, forecast oil will climb through Feb. 24. Twelve respondents, or 32 percent, predicted prices will decline and 10 estimated there will be little change. Last week, 53 percent of surveyed analysts expected a decrease.

Crude oil for March delivery advanced $4.57, or 4.6 percent, to $103.24 a barrel this week on the New York Mercantile Exchange, the biggest weekly gain this year. Today’s settlement was the highest since May 10. Prices are up 20 percent in the past year.

To contact the reporters on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net; Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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