"Quite possible" Iran, powers can reach nuclear deal next week - U.S. official

WASHINGTON Sat Nov 16, 2013 3:06pm IST

Iranian Foreign Minister Mohammad Javad Zarif (R) listens to European Union foreign policy chief Catherine Ashton during a news conference after nuclear talks at the United Nations European headquarters in Geneva November 10, 2013. REUTERS/Denis Balibouse

Iranian Foreign Minister Mohammad Javad Zarif (R) listens to European Union foreign policy chief Catherine Ashton during a news conference after nuclear talks at the United Nations European headquarters in Geneva November 10, 2013.

Credit: Reuters/Denis Balibouse

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WASHINGTON (Reuters) - Major powers and Iran are getting closer to an initial agreement to curb Iran's nuclear program, a senior U.S. official said on Friday, adding it is "quite possible" a deal could be reached when negotiators meet November 20-22 in Geneva.

But the official and Iranian Deputy Foreign Minister Abbas Araqchi both said they expected next week's talks to be "tough", and Araqchi said that there would be no deal unless the Iranian people's "rights" were guaranteed.

"For the first time in nearly a decade we are getting close to a first-step ... that would stop the Iranian nuclear program from advancing and roll it back in key areas," the official told reporters on condition of anonymity.

"I don't know if we will reach an agreement. I think it is quite possible that we can, but there are still tough issues to negotiate," the official said.

The official said EU foreign policy chief Catherine Ashton and Iranian Foreign Minister Javad Zarif were to meet on November 20 in Geneva. They will be joined later the same day by a wider group known as the P5+1 comprising Britain, China, France, Germany, Russia and the United States. The talks are likely to last through November 22, the official said.

Araqchi, a senior member of Iran's negotiation team, was quoted as saying by Mehr News Agency, "The expectation is that we will have tough talks, and unless the rights of the Iranian people are guaranteed, an agreement will not be reached."

The talks will seek to finalize an interim deal to allow time to negotiate a comprehensive, permanent agreement that would end a 10-year deadlock and provide assurances to the six powers that Iran's atomic program will not produce bombs.

Iran has denied that it wants to develop atomic weapons capability and insists its nuclear ambitions are limited to the peaceful generation of electricity and other civilian uses.

Negotiations last week in Geneva ended without an agreement, although the sides appeared to be close to a deal.

U.S. President Barack Obama has urged skeptical U.S. lawmakers not to impose new sanctions on Iran while talks continue and called for a pause in U.S. sanctions to see if diplomacy can work.

WHITE HOUSE APPROACH

In addition to lobbying lawmakers, the White House this week also contacted progressive groups supportive of diplomacy with Iran to make sure they stay aligned with the Obama administration's approach, a source close to the matter said.

Senior administration officials told supporters that they are guardedly optimistic about reaching an interim deal with Iran in Geneva and that the P5+1, including the French, are ready to present a unified position there, the source said.

The senior U.S. official who met with reporters on Friday said that published estimates of direct sanctions relief being offered under a preliminary deal - which have ranged from $15 billion to $50 billion - were "wildly exaggerated".

"It is way south of all of that and quite frankly it will be dwarfed by the restrictions that are still in place," the official said, saying to impose more sanctions threatened the negotiations not only with Iran but also among the six powers.

"The P5+1 believes these are serious negotiations. They have a chance to be successful," the official said. "For us to slap on sanctions in the middle of it, they see as bad faith."

A senior administration official said that Iran has about $100 billion in reserves, the vast majority of which is held in overseas bank accounts, which it has limited or no access to.

U.S.-imposed sanctions have hit Iran's economy hard. U.S. officials estimate that it contracted by more than 5 percent last year and its currency has lost about 60 percent of its value against the U.S. dollar since 2011.

Global oil prices slipped lower on Friday on the reports that Western powers may reach a deal but then rose slightly as markets weighed Libyan supply outages.

Commenting on a U.N. inspection report released on November 14 that said Iran had stopped expanding its uranium enrichment capacity, the official said the development was "a good thing" but did not resolve fundamental questions and concerns.

"We appreciate the step but the reason for our negotiation is to get at certainty that Iran can't have a nuclear weapon and we are a long way from that," the official said.

Western diplomats said one of the sticking points during talks was Iran's argument that it retains the "right" to enrich uranium. The United States argues Iran does not intrinsically have that right under the Nuclear Non-Proliferation Treaty.

The official dismissed suggestions that the issue could be a deal breaker. "I think there is a way to navigate that," the official said. "We each understand where each other is and what is possible, and what is not."

(Additional reporting by Matt Spetalnick and by Isabel Coles in Dubai; Editing by Louise Ireland)

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