U.N. nuclear chief hopeful on Iran deal before Baghdad meet

VIENNA (Reuters) - The U.N. nuclear supervisor flew to Tehran on Sunday voicing optimism he could reach a deal to investigate suspected atom bomb research - a possible breakthrough that Iran may hope could help ease Western sanctions pressure and deflect threats of war.

"I really think this is the right time to reach agreement. Nothing is certain but I stay positive," Yukiya Amano, director general of the International Atomic Energy Agency, said at Vienna airport, adding "good progress" had already been made.

But though Amano scheduled Monday's talks with Iran at such short notice that diplomats said agreement on new inspections seemed near, few see Tehran convincing Western governments to ease back swiftly on punitive measures when its negotiators meet big power officials in Baghdad on Wednesday.

Amano meets Iran's chief nuclear negotiator Saeed Jalili on Monday, two days before Jalili sits across a table in the Iraqi capital from Catherine Ashton, the senior EU official heading a six-power coalition comprised of the five U.N. Security Council permanent members plus Germany.

By promising cooperation with U.N. inspectors, diplomats say Iran might aim for leverage ahead of the broader negotiations, where the United States and its allies want Iran to halt works they say are cover for developing nuclear weapons. Western sanctions on Iran's energy exports, and threats by Israel and Washington of military action, have pushed up world oil prices.

Western diplomats say Amano, a veteran Japanese diplomat, would only make a rare visit to Tehran if he believed a framework agreement to give his inspectors freer hands in their investigation was close.

"We regard the visit ... as a gesture of goodwill," Iranian Foreign Minister Ali Akbar Salehi was quoted as saying by the Iranian student news agency. He hoped for agreement on a "new modality" to work with the U.N. agency that would "help clear up the ambiguities".

The nuclear watchdog wants access to sites, officials and documents to shed light on activities in Iran that could be used to develop the capability to make nuclear weapons, especially the Parchin military complex southeast of Tehran.

Two meetings between Iran and senior Amano aides in Tehran in January and February failed to make any notable progress. But both sides were more upbeat after a new round of talks in Vienna last week, raising hopes they were making headway.

"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, adding he did not expect to visit Parchin during his short, one-day stay in Tehran.

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 and the meeting with world powers, the P5+1, in Baghdad.

Such a deal would also not be enough in itself to allay international concerns. World powers want Iran to curb uranium enrichment, which can have both civilian and military purposes.

Iran, to general incredulity from its Israeli and Western adversaries, insists its nuclear program is intended only to generate electricity and other civilian uses. Unlike Israel, assumed to have the Middle East's only nuclear arsenal, Iran is a signatory to treaties that oblige it to work with the IAEA.

"We are not going to do anything concrete in exchange for nice words," another diplomat said of the Baghdad meeting, the arrangement of which stemmed from a P5+1 meeting with Iran in Istanbul last month that ended over a year of not talking.

"Presumably, we will get a flavor of what the Iranians are prepared to do," the diplomat said. "It sounds like they are interested in making progress."

Another Western diplomat said: "What we need now, with the situation in the region, are urgently concrete steps. So our talks will focus on something that can be implemented very quickly."

ISRAEL SCEPTICAL

Leaders of the Group of Eight, worried about the effect of high oil prices on their faltering economies, raised the pressure on Iran on Saturday, signaling their readiness to tap into emergency oil stockpiles quickly this summer if tougher new sanctions on Tehran threaten to strain supplies.

"All of us are firmly committed to continuing with the approach of sanctions and pressure in combination with diplomatic discussions," U.S. President Barack Obama said.

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 has failed.

Russia's deputy foreign minister said on Sunday that military action against Iran over its nuclear program was being considered in some Western countries.

"It is one of many various signals coming from various sources that the military option is considered as realistic and possible," Sergei Ryabkov told reporters on his way back from the G8 summit.

Israel has made clear its skepticism about the prospects for diplomacy, saying Iran is just trying to buy time.

"We don't see any readiness from the Iranian side to give up their nuclear ambitions and for them all the engagement, from our point of view, it's clear deception," Foreign Minister Avigdor Lieberman said on Sunday.

BAGHDAD GOALS

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.

Iran says it needs the uranium enriched to a fissile concentration of 20 percent for its medical research reactor.

An adviser to Iran's Supreme Leader Ayatollah Ali Khamenei said there were hopes the Baghdad meeting would be successful.

But Iran will not "tolerate any pressure and it decides about its destiny in the nuclear issue with full authority," Mehr News Agency quoted Ali Akbar Velayati as saying.

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 atomic arms.

Iran says the intelligence is fabricated, and has so far resisted requests for inspectors to visit Parchin.

Western diplomats say they suspect Iran is cleaning the site to remove incriminating evidence, a charge Tehran dismisses.

"I hope Amano asks for his people to see Parchin," one Western diplomat said. "But it seems a wild guess to me."

Diplomats say the six powers will probably aim to extract an offer from Tehran to implement some limited curbs and begin a long-term process of gradual concessions from all sides.

Their hope is that economic sanctions imposed by Western nations in the last year, targeting Iran's vital oil revenues and ability to trade with international partners, would be enough to force Iran to take that first step, one diplomat said.

Immediate confidence-building measures that Iran could offer are "not all that complicated," said former senior U.S. State Department official, James Dobbins, now with the Rand Corporation's International Security and Defense Policy Center.

"It is essentially, 'Stop enriching to 20 percent, ship out what you've already done ... and then let's last start talking about more comprehensive measures'."

But European diplomats say any corresponding changes to their further oil embargo plans are out of the question for now: "The EU oil sanctions are a very big card and a very big step," one said. "Just because they have been applied last doesn't mean they will be the first to be taken off."

(Additional reporting by Justyna Pawlak in Brussels, William Maclean in London, Marcus George in Dubai, Patrick Markey in Baghdad and Ori Lewis and Dan Williams in Jerusalem; Editing by Alastair Macdonald and Philippa Fletcher)

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