U.N. nuclear chief holds talks in Tehran, hopes for deal

VIENNA/DUBAI (Reuters) - The U.N. nuclear watchdog chief held rare talks in Tehran on Monday after voicing hope for a deal to investigate suspected atomic bomb research - a gesture Iran might make to try to get international sanctions relaxed and deflect threats of war.

International Atomic Energy Agency Director-General Yukiya Amano began discussions with the head of Iran's nuclear energy organization, Fereydoun Abbasi-Davani, a few hours after his pre-dawn arrival, according to ISNA news agency.

Amano, who was on his first trip to Iran since taking office in 2009, a period marked by rising tension between the IAEA and Tehran, was also due to meet Iran's chief nuclear negotiator, Saeed Jalili and Foreign Minister Ali Akbar Salehi on Monday. There was no word on the course of the talks by mid-afternoon.

"I really think this is the right time to reach agreement. Nothing is certain but I stay positive," Amano, a veteran Japanese diplomat with long experience in nuclear proliferation and disarmament affairs, said before departure from Vienna airport. He added that "good progress" had already been made.

But while Amano scheduled Monday's talks with Iran at such short notice that diplomats said a deal on improved IAEA access in Iran seemed near, few see Tehran going far enough to convince the West to roll back swiftly on punitive sanctions when its negotiators meet global power envoys in Baghdad on Wednesday.

"We are not going to do anything concrete in exchange for nice words," a Western diplomat said of the Baghdad meeting, the outcome of a big power session with Iran in Istanbul last month that ended a diplomatic freeze of more than a year.

Two days after seeing Amano, Jalili will hold talks in the Iraqi capital with Catherine Ashton, the European Union foreign policy chief heading a six-power coalition comprised of the five U.N. Security Council permanent members - the United States, Britain, France, Germany, Russia and China - plus Germany.

By dangling the prospect of enhanced cooperation with U.N. inspectors, diplomats say, Iran might aim for leverage for the broader talks where the United States and its allies want Tehran to curb works they say are a cover for developing atomic bombs.

Pressure for a deal has risen. Escalating Western sanctions on Iran's economically vital energy exports, and threats by Israel and the United States of last-ditch military action, have pushed up world oil prices, compounding the economic misery wrought by debt crises in many industrialized countries.

HOPE VIES WITH MISTRUST

Some diplomats and analysts said Amano, given a recent history of mistrustful relations with Iran, would go to Tehran only if he believed a framework agreement to give his inspectors freer hands in their investigation was close. Iran has been stonewalling IAEA requests for better access for four years.

"Amano would not have travelled to Tehran had he not been provided with assurances that progress could be made. If he returns to Vienna empty-handed, the embarrassment will be more damaging for Tehran than the agency," said Ali Vaez, senior analyst at the International Crisis Group.

"However, if the IAEA is satisfied with Tehran's cooperation, Iranian negotiators will have a new trump card to play at the negotiating table in Baghdad."

The U.N. watchdog is seeking access to sites, nuclear officials and scientists and documents to shed light on work in Iran applicable to developing the capability to make nuclear weapons, especially the Parchin military complex outside Tehran.

Two meetings between Iran and senior Amano aides in Tehran in January and February failed to produce any notable progress. But both sides were more upbeat after another round of talks in Vienna last week, raising hopes for a deal.

"We need to keep up the momentum. There has been good progress during the recent round of discussions between Iran and the IAEA," Amano said, stressing that he did not expect to visit Parchin during his short, one-day stay in Tehran.

"We regard the visit ... as a gesture of goodwill," Salehi said. He hoped for agreement on a "new modality" to work with the IAEA that would "help clear up the ambiguities".

DOUBTS

Yet while an Iranian agreement on a so-called "structured approach" outlining the ground rules on how to address the IAEA's questions would be welcome, it remains to be seen how and when it will be implemented in practice.

"We'll see if the Iranians agree to let the agency visit Parchin. I have my doubts, no matter what any agreement says on paper," said one Western envoy ahead of Amano's visit to Iran.

Such a deal would also not be enough in itself to allay international concerns. World powers want Iran to curb uranium enrichment, which can yield fuel for nuclear power plants or for nuclear bombs, depending on the level of refinement.

Iran, to general disbelief from its Israeli and Western adversaries, insists its nuclear program is intended only to generate electricity in a country that is one of world's top oil exporters and to produce isotopes for cancer treatment.

Unlike its arch-enemy Israel, assumed to harbor the Middle East's only nuclear arsenal, Iran is a signatory to treaties that oblige it to be transparent with the IAEA.

ISRAEL SCEPTICAL

Leaders of the Group of Eight, worried about the effect of high oil prices on their faltering economies, turned up the heat on Iran on Saturday, signaling readiness to tap into emergency oil stocks quickly this summer if tougher new sanctions on Tehran threaten to dry up supplies of crude.

Israel, convinced a nuclear-armed Iran would pose a mortal threat, has - like the United States - not ruled out air strikes to stop Iran's atomic progress if it deems diplomacy at an end.

Israel believes Iran is using the talks only to buy time.

In Baghdad, the powers' main goal is to get Iran to stop the higher-grade uranium enrichment it started two years ago and has since expanded, shortening the time needed for any weapons bid.

"What the powers are proposing right now is a kind of interim arrangement ... (but) this certainly is not sufficient to stop the military (nuclear) project in Iran," said Israeli Vice Prime Minister Moshe Yaalon.

"Our fear is that from Iran's perspective this is a sort of sacrifice of a pawn in a chess game in order to protect the king. We are not voicing satisfaction with this move, if it is the final move," he told Israel Radio.

Iran says it needs uranium enriched to a fissile concentration of 20 percent for its medical isotope reactor. Enrichment to 5 percent of fissile purity is suitable for power plant fuel, while 90 percent constitutes fuel for bombs.

The IAEA wants Iran to address issues raised by an agency report last year that revealed intelligence pointing to past and possibly ongoing activity to help develop nuclear explosives.

Iran says the intelligence is fabricated, and has so far resisted requests for inspectors to examine Parchin, maintaining that it is a purely conventional military installation outside the writ of nuclear inspectors.

(Additional reporting by Justyna Pawlak in Brussels, William Maclean in London, Patrick Markey in Baghdad, Ori Lewis and Dan Williams in Jerusalem; Editing by Mark Heinrich)

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