By Edith Honan and Patrick Worsnip
NEW YORK (Reuters) - Big power envoys met on Wednesday to pursue the quest for fresh U.N. sanctions to try to halt Iran's nuclear program, but diplomats forecast weeks of haggling over a text the Security Council can pass.
Ambassadors from the five permanent members of the council and Germany gathered at the U.S. mission to the United Nations for their second meeting in a week since China, which has close economic ties with Iran, agreed to join the talks.
China's Li Baodong told reporters, "We have a very important consultation with a focus on diplomacy."
Russia's Vitaly Churkin said, "I expect a good discussion," adding that he expected the talks to go on "for a while."
The envoys were discussing a U.S. draft resolution, first circulated weeks ago, that provides for a fourth round of sanctions on Iran for its refusal to stop uranium enrichment. The West accuses Tehran of seeking to produce atomic arms but Tehran says it aims only to generate electricity.
The draft proposes new curbs on Iranian banking, a full arms embargo, tougher measures against Iranian shipping, moves against members of Iran's Islamic Revolutionary Guard Corps and a ban on new investments in Iran's energy sector.
But diplomats told Reuters that China's Li had indicated displeasure at the proposals affecting Iran's energy sector at a first meeting last Thursday with his U.S., British, French, German and Russian counterparts.
Other diplomats said that meeting had been largely confined to statements of opening positions by the ambassadors and that the hard work of agreeing to a text remained to be done.
U.S. President Barack Obama pressed 46 countries attending a nuclear security summit in Washington on Tuesday for swift sanctions on Iran but acknowledged China had concerns about the economic impact and said negotiations were difficult.
Iran is the third largest crude oil supplier to energy-hungry China.
U.S. Defense Secretary Robert Gates, visiting Peru, hinted Washington might not insist on the toughest possible sanctions, saying the importance of a resolution was "less the specific content than the isolation of Iran by the rest of the world."
"QUITE FAR APART"
One diplomat in New York with knowledge of the negotiations put the chances of an agreement in April at only 25-30 percent. Diplomats see little chance of a resolution in May when Lebanon, whose government includes Iranian-backed Hezbollah, chairs the Security Council, and say June seems more likely.
"We're right at the beginning of the discussion on a text here, and it should be no surprise that they're quite far apart," the diplomat said. "The Chinese want something much, much weaker and much, much narrower" than the U.S. draft.
Diplomats say Russia is keener than China to slap new sanctions on Iran, but it, too, wants to water down the text.
"If we speak about energy sanctions, I'll give you my opinion. I think that we are unlikely to achieve a consolidated position in the world community on this issue," Russian President Dmitry Medvedev said in an interview with ABC television this week.
Even if the permanent five can agree, weeks could be spent in further negotiations with the 10 temporary members of the council, three of whom -- Lebanon, Turkey and Brazil -- have indicated they may abstain or vote against a resolution.
U.S. Under Secretary of State for Political Affairs William Burns said on Wednesday China was likely to agree to sanctions. But he told a Senate hearing it would be "very difficult" to get Beijing or Moscow to agree to cut off refined petroleum products to Iran, a proposal backed by many U.S. lawmakers.
Underlining that point, industry sources said on Wednesday state-run Chinaoil had sold a total of about 600,000 barrels of gasoline worth around $55 million to the Islamic Republic.
German carmaker Daimler said on Wednesday, however, that it would almost entirely sever business ties with Iran because of what chief executive Dieter Zetsche called "the policies of the current Iranian leadership."
Western powers say acquisition by Iran of nuclear weapons, would be hugely destabilizing to the Middle East.
Iran could produce enough highly enriched uranium for a single nuclear bomb in as little as one year but would probably need three to five years to build a deliverable weapon, top Pentagon officials said on Wednesday.
(Additional reporting by Luke Pachymuthu in Dubai, Seng Li Peng in Singapore, Adam Entous in Washington and Phil Stewart in Lima; Editing by Vicki Allen)
