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Iran preparing to start plant needed for interim nuclear deal: sources

By Fredrik Dahl

VIENNA (Reuters) - Iran has taken preparatory action to start up a uranium conversion plant it needs to fulfil an interim nuclear agreement reached with six world powers last year before the accord expires this month, diplomatic sources said.

The launch of the facility would show Tehran's commitment to the landmark Nov. 24 deal as it holds talks with the United States, Russia, France, Germany, Britain and China on a long-term settlement of the dispute over its atomic aims.

The major powers want Iran to significantly scale back its nuclear programme to deny it any capability to quickly produce atomic bombs. Iran says its activities are entirely peaceful and want crippling sanctions lifted as soon as possible.

In view of still wide differences in positions, some diplomats and experts believe the negotiations - and the preliminary agreement - may need to be extended. [ID:nnL6N0PL4FK]

But a spokesman for European Union foreign policy chief Catherine Ashton, who leads the negotiations on behalf of the powers, said they remained determined to try to get a comprehensive agreement by a self-imposed July 20 deadline.

"We see seriousness also on the other side," Michael Mann told reporters. "It is difficult, there are still significant gaps, but that is not a surprise. We are talking about very complicated technical issues and also very complicated political issues. So we are working hard to try to narrow those gaps."

Under the initial accord that runs for six months until July 20, Iran is supposed to convert a large amount of low-enriched uranium gas into an oxide form that would be less suitable for processing into nuclear bomb material. It was one of the terms of the deal that won Tehran some easing of sanctions.

To be able to do that, it has been building a facility near the central city of Isfahan for turning the gas into powder.

After months of delays, the U.N. International Atomic Energy Agency (IAEA) in May said the plant's commissioning had begun, but it was still not operating.

Since then, however, the sources said practical steps had been taken indicating the work could start soon, if it had not already. They include removal of IAEA seals on a uranium gas cylinder, necessary before connecting it to the conversion line.

With time running short, the issue is closely watched by diplomats monitoring Iran's compliance with the November accord.

It was negotiated to buy time for talks on a permanent agreement intended to remove the risk of a new Middle East war over Iran's nuclear aspirations.

Those negotiations began in February and resumed last week in Vienna with the aim of reaching an accord to replace the interim deal. With less than ten days to go before the deadline, U.S. Secretary of State John Kerry and some of the other big power foreign ministers will join the talks this weekend.

BIGGER URANIUM STOCKPILE

While Iran under last year's agreement halted its most sensitive work, enrichment to a fissile concentration of 20 percent, it is allowed under the pact to continue producing uranium gas refined to up to 5 percent.

However, reflecting Western concern also about this reserve, Iran undertook not to increase it so that it is not larger by the end of the half-year accord than what it was when it took effect on Jan. 20, Western diplomats have said.

Because of the conversion plant's delay, the low-grade uranium stockpile has grown to nearly 8.5 tonnes in May from 7.6 tonnes in February, according to IAEA reports. Experts say Iran will be able to convert a large amount in a relatively short time once the facility required for this is up and running.IAEA reports have shown that Iran is meeting all the other requirements under the interim agreement.

Iran says it is producing low-enriched uranium to fuel a planned network of nuclear power plants, not to develop bombs. Uranium must be enriched to a high degree - about 90 percent fissile purity - for a nuclear weapon.

Experts say Iran potentially has enough of this kind of uranium gas for a few nuclear weapons if enriched much further. Limiting its overall enrichment capacity is one of the thorniest issues in the negotiations on a final deal.

(Editing by Andrew Roche)

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