GENEVA (Reuters) - Iran has indicated a readiness to scale back uranium enrichment the West fears could be put to making nuclear bombs, suggesting it is willing to compromise for a deal to win relief from harsh economic sanctions, diplomats said on Wednesday.
Details of Iran's proposals, presented during two days of negotiations in Geneva with six world powers, have not been made public, and Western officials were unsure whether Tehran was prepared to go far enough to clinch a breakthrough deal.
But, in a clear sign of hope, the two sides agreed to hold follow-up negotiations on November 7-8 in Geneva, a Western diplomat told Reuters as the current two-day round drew to a close.
After a six-month hiatus, Iran and the United States, Russia, China, France, Britain and Germany began negotiations in earnest on Tuesday to end a long, festering stand-off that could boil over into a new Middle East war.
Both sides sought to dampen expectations of any rapid deal at the meeting, the first since moderate President Hassan Rouhani was elected in June pledging to scrap the politics of confrontation to ease Iran's international isolation.
The powers want the Islamic Republic to stop higher-grade enrichment to allay concerns that it would provide Iran a quick path to bomb-grade nuclear fuel. Tehran says it is refining uranium solely to generate more electricity for a rapidly expanding population and to produce isotopes for medicine.
After the first day of talks in Geneva, Iranian Deputy Foreign Minister Abbas Araqchi suggested Tehran was prepared to address long-standing calls for the U.N. nuclear watchdog to have wider and more intrusive inspection powers.
He also told the official IRNA news agency that measures related to its uranium enrichment were part of the Iranian proposal, but hinted the Islamic Republic was not inclined to make its concessions quickly.
"Neither of these issues are within the first step (of the Iranian proposal) but form part of our last steps," he said without elaborating, in comments reported on Wednesday.
The sequencing of any concessions by Iran and any sanctions relief by the West could prove a stumbling block en route to a landmark, verifiable deal. Western officials have repeatedly said that Iran must suspend enriching uranium to 20 percent fissile purity, their main worry, before sanctions are eased.
"Are we there yet? No, but we need to keep talking," a Western diplomat said as talks resumed on Wednesday.
Israel, Iran's arch-foe, urged the powers to be tough in the talks by demanding a total shutdown of enrichment and ruling out any early relaxation of sanctions. But it did not repeat veiled threats to bomb Iran if it deems diplomacy pointless.
British Foreign Secretary William Hague underscored Western reluctance to move fast, saying during a trip to Tokyo that any changes in sanctions would only follow action by Iran.
"We are not today in a position to make any changes in those sanctions. Sanctions must continue. Sanctions are important part of bringing Iran to the negotiating table," he told reporters.
Western diplomats were hesitant to divulge specifics about the negotiations due to sensitivities involved - both in Tehran, where conservative hardliners are skeptical about striking deals that could curtail the nuclear program, and in Washington, where hawks are reluctant to support swift sanctions relief.
But Iran, diplomats said, has made much more concrete proposals than in the past, when ideological lectures and obfuscations were the norm, to the point that Tehran's negotiators were concerned about details being aired in public before they had had a chance to sell them back in Tehran.
Iranian Foreign Minister Mohammad Javad Zarif said in a post on Facebook that secrecy was working in the negotiators' favor.
"Normally, the less negotiators leak news, the more it shows the seriousness of the negotiations and the possibility of reaching an agreement," he said.
Diplomats said other proposals Iranian envoys had made regarding eventual "confidence-building" steps included halting 20 percent enrichment and possibly converting at least some of existing 20 percent stockpiles - material that alarms the powers as it is only a short technical step away from weapons-grade - to uranium oxide suitable for processing into reactor fuel.
COMPLETE HALT TO ENRICHMENT OUT OF QUESTION
But Iran did not intend to renounce all enrichment itself "under any circumstances", the Russian state news agency RIA quoted an unidentified Iranian delegation source as saying.
He was dismissing the maximal demand of U.S. and Israeli hawks which Western diplomats concede would undermine Rouhani's authority at home by exposing him to accusations of a sell-out from conservative hardliners in the clerical and security elite.
Most Iranians of whatever political persuasion equate the quest for nuclear energy with national sovereignty, modernization and a standing equal to the Western world.
"Apart from suspending 20 percent enrichment, it is possible to consider a scenario involving reducing the number of centrifuges (enriching uranium)," RIA quoted the delegate as saying. "However, for this, concrete steps from our opponents are required, which we do not see yet."
Iran has sharply expanded its uranium enrichment capacity in recent years and it now has roughly 19,000 installed such machines. Of those, about 10,400 are currently enriching.
The fact that Iran has so many idle centrifuges potentially allows it to swiftly expand enrichment, if it wanted, or to use them as a bargaining chip in negotiations with the powers.
Rouhani's election in June turned Western pessimism into guarded optimism that Iran might be ready to do a deal before tensions escalated uncontrollably into armed conflict.
The sprawling Shi'ite state of 75 million people has become anxious to be rid of Western-led sanctions that have impaired its economy, slashed its critical oil export revenues by 60 percent and brought about a devaluation of its rial currency.
Iran has previously spurned Western demands that it shelve 20 percent enrichment as an initial step in return for modest sanctions relief encompassing, for example, imported aircraft parts. Instead, it has called for the most far-flung and painful sanctions, targeting oil and banking sectors, to be rescinded.
(Additional reporting by Fredrik Dahl, Yeganeh Torbati, Justyna Pawlak and Stephanie Nebehay in Geneva, Marcus George in Dubai, Kiyoshi Takenaka in Tokyo and Alexei Anishchuk in Moscow; Editing by Mark Heinrich)
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