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Iranian Envoy Sees Possible Breakthrough on Nuclear Deal

Photographer: Scott Eells/Bloomberg

Mohammad Khazaee, Iran's ambassador to the United Nations, speaks during an interview in New York on March 18, 2013. Close

Mohammad Khazaee, Iran's ambassador to the United Nations, speaks during an interview... Read More

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Photographer: Scott Eells/Bloomberg

Mohammad Khazaee, Iran's ambassador to the United Nations, speaks during an interview in New York on March 18, 2013.

Iran for the first time sees the “possibility for a breakthrough” in negotiations next month over its disputed nuclear program, the Islamic Republic’s ambassador to the United Nations said.

Talks in Kazakhstan three weeks ago marked a “turning point” where the U.S. and five other world powers seemed “more realistic” about Iran’s bottom-line position that it has a right to enrich uranium for peaceful use, Mohammad Khazaee said in an interview March 18 at Bloomberg’s New York headquarters.

Khazaee, Iran’s UN envoy since 2007, said the nuclear program has become a matter of “national pride, regardless of how much we need, how much it costs.” Economic sanctions haven’t sapped Iran’s resolve and, instead, have impeded talks by fueling Iran’s suspicion of its critics, he said.

Khazaee spoke before President Barack Obama arrived today in Israel, where Iran’s nuclear ambitions are on the agenda for talks with Israeli Prime Minister Benjamin Netanyahu.

Obama has supported giving more time for economic sanctions to persuade Iran to make nuclear concessions, while Netanyahu has repeatedly said a military strike may be the only way to stop Iran from producing an atomic bomb that could threaten Israel.

The U.S., the U.K., France, Germany, China and Russia proposed at a two-day meeting last month in Almaty, Kazakhstan, the easing of sanctions on Iran’s petrochemicals and gold trade in exchange for Iran ceasing production of medium-enriched uranium, according to officials involved in the talks.

Technical Talks

Technical experts from Iran and the six world powers held talks in Istanbul on March 18 to discuss details of the plan. A Western diplomat, who asked not to be named because of the sensitivity of the negotiations, said yesterday the Istanbul technical discussions were genuine and businesslike.

Talks among senior political representatives are to resume April 5 in Almaty.

Iran says its 20 percent-enriched uranium is for medical isotopes for cancer patients. Such material can be further enriched to produce bomb-grade fuel, and the U.S. and its allies suspect Iran of seeking the capability to make a nuclear bomb.

While the offer to ease petrochemical and gold sanctions is “positive,” Khazaee said it “doesn’t help that much” and won’t be the reason if Iran makes any deal.

Khazaee, who has been Iran’s vice minister for the economy, chief representative to the World Bank and a member of parliament, dismissed the Obama administration’s assertion that sanctions on banking, trade and oil exports -- Iran’s main source of revenue -- have forced Iran to consider an agreement after years of stalled talks.

Oil Markets

Iran was the No. 6 producer in the Organization of Petroleum Exporting Countries in February, and any rise in tensions would hit oil markets. West Texas Intermediate crude for April delivery, which expires today, slid $1.58 yesterday to settle at $92.16 a barrel on the New York Mercantile Exchange.

Iran survived far worse conditions, including shortages of staples such as milk, in the 1980s during the Iran-Iraq War, Khazaee said. Today’s high prices, fueled by restrictions on Iran’s oil exports and banking transactions, seem minor in comparison, he said.

The key to a deal would be international acceptance of what his government sees as its right under the nuclear Non- Proliferation Treaty to enrich uranium, even at the 5 percent level needed to fuel power plants, Khazaee said.

Accepting Enrichment

Because even Iranians viewed as “agreeable” by the U.S. share this view, he said presidential elections set for June in Iran won’t affect talks.

Some U.S. officials have privately said there will be pressure on the Obama administration to accept Iran’s uranium enrichment at low levels under UN safeguards. Israel and some non-proliferation specialists have said Iran must be denied any domestic enrichment capability -- a position Khazaee said is a non-starter.

Khazaee said the underlying obstacle is the “mistrust between the two sides.” Fear of Iran is based on “allegations or suspicions,” he said, denying that Iran is seeking to destabilize or attack any of its neighbors. The U.S. has sanctioned Iran for support of terrorism, human rights abuses and ballistic missile and nuclear proliferation.

On the eve of Obama’s trip, Khazaee asserted that “Israelis every day are threatening Iran” and called on Obama to urge Israel to give up its undeclared nuclear arsenal. He said Israel has nothing to fear from Iran.

No Attacks

“Iranians have not, and they do not intend to attack any country, any nation in the region,” Khazaee said.

The U.S. and Israel are among countries that have accused Iran of supporting proxies such as the militant group Hezbollah to carry out attacks on Israeli and Jewish targets and a plot to kill Saudi Arabia’s ambassador to Washington.

Iran doesn’t recognize the legitimacy of Israel and has rejected a two-state solution for Palestine. Iranian President Mahmoud Ahmadinejad has called for a referendum of all the inhabitants in Israel, the West Bank and Gaza.

In an interview last week with Israel’s Channel 2 television, Obama said Iran is more than “a year or so” away from being able to build a nuclear weapon and repeated that “all options are on the table” if diplomacy fails.

Obama reached out to Iranians with a March 18 video to mark the Iranian New Year, urging the government to take “immediate and meaningful steps to reduce tensions and work toward an enduring, long-term settlement of the nuclear issue.”

‘Disastrous’ Result

Khazaee warned that if Israel attacked Iran, the “result would be disastrous for everybody.” A conflict in the region could close the Strait of Hormuz, through which 20 percent of the world’s oil is shipped daily on average, and military analysts have said Iran would strike back using proxies around the world.

Khazaee discounted the possibility of an Israeli strike.

“I don’t think it’s going to happen because there are even some wise people in the region that they know that they should not play with the lion in the region, which is Iran,” he said.

To contact the reporters on this story: Indira A.R. Lakshmanan in New York at ilakshmanan@bloomberg.net; Kambiz Foroohar in New York at kforoohar@bloomberg.net

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

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