By Louis Charbonneau and Parisa Hafezi
VIENNA (Reuters) - Iran and six powers agreed to continue talking for four more months after failing to meet a July 20 deadline to reach a deal on curbing the Iranian nuclear programme in exchange for ending sanctions, enabling Tehran to access $2.8 billion of frozen cash.
But U.S. officials warned that most sanctions against the Islamic Republic would remain in place during the extended talks.
The announcement came in the early hours of Saturday after nearly three weeks of marathon talks in a 19th century Viennese palace, where senior officials from Iran, the United States, Britain, France, Germany, Russia and China were holed up in negotiating rooms struggling to reach an agreement.
Iran will be allowed to access in tranches an additional $2.8 billion of its frozen assets during the period of extended talks, senior U.S. officials told reporters in Vienna.
"Iran will not get any more money during these four months than it did during the last six months, and the vast majority of its frozen oil revenues will remain inaccessible," U.S. Secretary of State John Kerry in a statement released in Vienna on Saturday. "We will continue to vigorously enforce the sanctions that remain in place."
It remains uncertain whether four more months of high-stakes talks will yield a final deal, since major underlying differences remain after six rounds of meetings this year.
Western nations fear Iran's nuclear programme may be aimed at developing a nuclear weapons capability. Tehran denies this.
The six powers want Iran to significantly scale back its nuclear enrichment programme to make sure it cannot yield nuclear bombs. Iran wants sanctions that have severely damaged its oil-dependent economy to be lifted as soon as possible.
After years of rising tension between Iran and the West and fears of a new Middle East war, last year's election of a pragmatist, Hassan Rouhani, as Iran's president led to a thaw in ties that resulted in the current nuclear negotiations.
A senior U.S. official told reporters that Washington would make clear to countries around the world that "Iran is not open for business" during the four months of extended talks.
In exchange for the $2.8 billion, Kerry said, Iran agreed to take several steps, including to keep neutralizing its most sensitive uranium stocks - uranium that has been enriched to a level of 20 percent purity - by converting it to fuel for a research reactor in Tehran used to make medical isotopes.
Kerry said the future of Iran's enrichment programme was one of the most divisive topics.
"There are very real gaps on issues such as enrichment capacity at the Natanz enrichment facility," he said. "This issue is an absolutely critical component of any potential comprehensive agreement. We have much more work to do in this area, and in others as well."
"FEET TO THE FIRE"
French Foreign Minister Laurent Fabius told Reuters in Cairo that major disagreements remained though some had been resolved.
"There have been some advances towards finding an agreement, that's why we decided to extend the negotiations," he said. "If we had thought there was no potential for a deal we would have stopped immediately."
Some members of U.S. Congress are eager to impose new and tougher sanctions on Iran. Several senior U.S. officials said on Saturday that they would continue to oppose new sanctions as long as the negotiations are underway but would drop their opposition if the talks were to collapse.
"We understand Congress' desire to hold Iran's feet to the fire," one of the U.S. officials said.
The talks are taking place because of an interim accord Iran and the six reached in Geneva in November 2013 that gave Tehran limited sanctions relief - including cash - in exchange for halting some nuclear work. That created time and space for the negotiation of a permanent deal to end the decade-long dispute.
Iranian Foreign Minister Mohammad Javad Zarif told reporters earlier this week that Tehran would be willing to delay development of an industrial-scale uranium enrichment programme for up to seven years and to keep the 19,000 centrifuges it has installed so far for this purpose.
But Kerry said after several face-to-face meetings with Zarif it was "crystal clear" that for Iran to keep all of its existing centrifuges was out of the question.
Another difficult issue in the talks, diplomats said, is how to address Iran's suspected past atomic bomb research and the duration of any long-term restrictions on its nuclear programme. The negotiations began in February in Vienna.
EU foreign policy chief Catherine Ashton and Zarif said in a joint statement that the talks would resume in the coming weeks. The extension begins on July 21 and runs through Nov. 24.
(Additional reporting by Fredrik Dahl in Vienna and John Irish in Cairo; Writing by Louis Charbonneau; Editing by Lisa Shumaker, Mohammad Zargham and Rosalind Russell)
- Iran, powers extend talks after missing nuclear deal deadline
- Iran, six powers agree to 4-month extension of nuclear talks - envoys
- Iran, six powers haggle over extending nuclear talks -diplomats
- Iran rejects 'excessive demands' in nuclear talks with six powers
- Iran and powers to resume nuclear talks on July 2