Talks could be West's "last chance": Iran envoy

TEHRAN (Reuters) – Talks next week between Iran and major powers concerned about its nuclear programme could be the "last chance" for the West because Tehran's atomic capability is improving, a senior Iranian official was quoted as saying.

Ali Asghar Soltanieh, Tehran's nuclear ambassador, raised the stakes for the January 21-22 meeting with the five permanent members of the U.N. Security Council plus Germany, which want assurances that Iran is not developing nuclear weapons.

Once Iran can make its own fuel for a research reactor, which it has said will happen this year, it may not return to negotiations if the talks to be held in Istanbul fail, the official IRNA news agency quoted him as saying on Wednesday.

"It might be the last chance because by installing fuel rods produced by Iran in the core of the Tehran Research Reactor, probably parliament will not allow the government to negotiate or send its uranium outside the country and the Istanbul meeting might be the last chance for the West to return to talks."

Iran's Supreme Leader, Ayatollah Ali Khamenei, has the ultimate say on its nuclear policy and diplomacy.

A similar round of talks concluded in October 2009 with a tentative pact for Iran to export some of its low-enriched uranium in exchange for fuel rods made from higher-enriched, 20 percent uranium to run the reactor which makes medical isotopes.

But that deal, meant as a confidence building step leading to further talks, unravelled when Tehran backed away from the terms, ultimately leading to a new wave of sanctions which some analysts say helped push Tehran back to the negotiating table.

REVERSIBLE

Acting Foreign Minister Ali Akbar Salehi said on Saturday that Iran would be able to produce its own fuel material for the Tehran reactor later this year, making any swap deal "lose its meaning".

Bruno Tertrais, Senior Research Fellow at the Foundation for Strategic Research in Paris, said Soltanieh's statement was largely bluff.

"In any case, Mr Soltanieh's argument is reversible -- we could always say it's the last chance for Iran.

"When I say bluff, I mean I am not at all certain that Iran has the technical capacity to make the fuel necessary for this type of reactor," he said, echoing the general assessment of Western officials and nuclear experts.

"Now if Iran wants to go down that road then, good luck!"

The U.N. Security Council has urged Iran since 2006 to suspend its uranium enrichment -- which yields fuel for nuclear reactors or, if done to a much higher level, for nuclear bomb -- in exchange for a packet of economic and diplomatic incentives.

Western diplomats do not anticipate a major breakthrough in Istanbul, in view of Iran's refusal to even discuss enrichment.

"I think the best outcome would be agreement to another meeting," said one senior Western diplomat in Vienna, the home of the U.N.'s International Atomic Energy Agency (IAEA).

Soltanieh reiterated Iran's stance. "We consider the possession of peaceful nuclear technology, especially uranium enrichment for peaceful purposes and under the supervision of the IAEA, as our absolute right," IRNA quoted him as saying.

"By no means will we give up on our undeniable peaceful nuclear technology."

Tertrais said Iran had no interest in walking away from the negotiation process, rather in stretching it out.

"The Iranian strategy is one of maintaining a diplomatic process while pursuing all their nuclear activities and limiting the risk of coercive options like new sanctions of even the risk of military action. It is in Iran's interests to keep the diplomatic process alive."

(Additional reporting by Robin Pomeroy and by Fredrik Dahl in Vienna; Writing by Robin Pomeroy; editing by Mark Heinrich)