Iran Urged to Move Toward Nuclear Deal by U.S., Partners

The U.S. and its partners are urging Iran to curb its nuclear activities in exchange for an offer that would ease banking, petrochemical and gold sanctions, according to two officials close to negotiations aimed at addressing international concerns about the Islamic Republic’s atomic ambitions.

In exchange for limited sanctions relief, Iran must agree to cease its output of 20 percent enriched uranium at negotiations that started today in Almaty, Kazakhstan. Iran considers an offer along these lines to be unbalanced and is preparing its own updated counterproposal, according to the officials.

After a hiatus in talks that stalled last June, Iran resumed negotiations with six world powers -- the U.S., Britain, France, Germany, China and Russia. The group is seeking an eventual long-term agreement that will lead to the lifting of sanctions imposed on the Persian Gulf state if it abandons illicit nuclear activities. Iran’s counteroffer resembles a proposal made at the last round of talks in Moscow, though it responds to some concerns from the group of powers, the officials said.

“We have come here with a revised offer and we have come to engage with Iran in a meaningful way,” Catherine Ashton, the European Union’s foreign-policy chief who serves as lead negotiator for the six partners, said before the start of talks today. The six powers want to see a “good and detailed conversation, with the ambition that we see progress by the end of the meeting.”

Listening Mode

Iranian officials, who spoke on condition of anonymity because they weren’t authorized to comment publicly, said they had returned to talks in a listening mode. Iran will reject any offer that doesn’t recognize what they state is their nation’s right under international treaty to enrich uranium for peaceful civilian use, the officials said.

One wild card that might signal an opening is the possibility of a direct meeting between the U.S. and Iran on the sidelines of the group gathering. The last time that happened was in October 2009 in a Geneva round of negotiations.

“For several years before 2009, Iranian officials frequently claimed that the nuclear impasse could be quickly resolved if only the U.S. and Iran could hold bilateral talks,” said Patrick Clawson, a Mideast scholar and director of research at the Washington Institute for Near East Policy. “Then when the U.S. agreed to such talks, Iran lost interest.”

Credible, Rational

The pre-talks jockeying gave no indication whether differences had narrowed heading into this round. The Iran negotiating team is expecting a “credible and rational response,” and any agreement should be “step by step,” Iranian state television reported today.

Ashton’s spokesman, Michael Mann, said the six partners have prepared “a good and updated offer” that is a “balanced and a fair basis for constructive talks.” It addresses international concerns that Iran may be seeking a covert nuclear-weapons capability, while also being “responsive to Iranian ideas” presented at three rounds of talks from April to June last year that failed to achieve a deal, he said.

Both sides will need time to consider the other’s offers and, while talks may extend into a second day, no major breakthrough is expected this week, nor are bilateral talks very likely, diplomats from three countries said.

Path Forward

The message to Iran before today’s talks is that there’s a path forward to lift sanctions that have reduced the Persian Gulf nation’s average monthly oil exports by half since last July and sent its currency plunging, according to U.S. officials who asked not to be identified because of the sensitivity of the issue.

In London, U.S. Secretary of State John Kerry said yesterday that a “window for a diplomatic solution is open,” and urged Iran to “negotiate in good faith.” At a news conference, Kerry and U.K. Foreign Secretary William Hague expressed determination to prevent Iran getting nuclear weapons, a potential development that Kerry called “simply unacceptable.”

West Texas Intermediate oil slipped following Kerry’s comments and as the euro reversed gains against the dollar. WTI for April delivery was down 90 cents, or 1 percent, at $92.21 a barrel in electronic trading on the New York Mercantile Exchange. Brent oil for April settlement on the London-based ICE Futures Europe exchange decreased as much as $1.14, or 1 percent, to $113.30 a barrel. Iran was tied with the United Arab Emirates last month as the No. 5 producer in the Organization of Petroleum Exporting Countries.

20% Uranium

To start earning relief from sanctions, the officials involved in the talks said, Iran must be prepared to abandon its enrichment of uranium to 20 percent purity, which puts it closer to producing bomb-grade fuel if it chooses to do so. Iran says its nuclear program is for civilian energy and medical research. The U.S. and its allies suspect it is also a cover for a covert atomic-weapons program.

The six powers won’t consider a full lifting of sanctions as proposed by the Iranian side, and instead would like to see step-by-step equivalent actions taken by both sides, U.S. and Western diplomats said. If Iran refuses to take the first step toward an eventual deal, more sanctions will be imposed, officials said.

U.S. Offer

Vice President Joe Biden reiterated recently that the U.S. is willing to talk directly with Iran about both sides’ concerns. Iran’s Supreme Leader Ayatollah Ali Khamenei publicly appeared to brush off the offer, saying Iran wouldn’t negotiate with a gun to its head, a reference to dozens of sanctions on Iranian oil, banking, shipping and trade imposed by the U.S. and the EU since late 2011.

U.S. officials said yesterday the offer to meet directly remains on the table, though it was unclear if Iranian negotiators would choose to do so.

The perennial challenge in dealing with Tehran “is that the Iranian officials who want to talk to America can’t deliver, and those who can deliver don’t want to talk,” Karim Sadjadpour, a senior associate at the Carnegie Endowment for International Peace in Washington, said in an interview.

To contact the reporter on this story: Indira A.R. Lakshmanan in Almaty, Kazakhstan at ilakshmanan@bloomberg.net

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

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