Iran's nuclear research looms as hurdle in talks with powers

VIENNA (Reuters) - Iran says it will not cede its "right" to install advanced machinery to refine uranium, signaling defiance on what looks likely to be a serious sticking point in its nuclear talks with world powers that began on Tuesday.

Iran's development of new-generation centrifuges is under scrutiny in the West as they would enable a much more swift accumulation of fissile material that could be used for nuclear weapons if enriched to a high degree.

Faced with technical hurdles and difficulty in obtaining parts abroad, Iran has been trying for years to replace the erratic, 1970s vintage IR-1 centrifuge it now operates at its underground Natanz and Fordow uranium enrichment facilities.

Although Iran's progress so far appears limited, it is believed to be an issue that Western officials would want to see addressed as part of any final settlement of the decade-old dispute over Iran's nuclear program.

A senior U.S. official said last month research and development (R&D) was among issues that "will have to be dealt with in the comprehensive resolution", without making clear how.

"Iran's development of more advanced centrifuges would greatly ease its ability to conduct a secret breakout to nuclear weapons," a U.S. think-tank, the Institute for Science and International Security (ISIS), said in a report.

"More significant limitations on Iran's R&D combined with greater transparency of this program should be included in the final step of a comprehensive solution," ISIS added.

Tehran says it needs to produce low-enriched uranium to fuel a planned network of nuclear power plants and denies allegations by the United States and its allies that it is seeking the capability to assemble atomic bombs.

"Iran will not accept any limitation on its right to replace centrifuges with more advanced machines," a member of the Iranian delegation said on the sidelines of this week's talks in Vienna with the six powers - the United States, France, Russia, China, Germany and Britain.

It has often portrayed Western demands on the country to curb its nuclear program as an attempt by its foes to deny it the kind of scientific advances they themselves are free to enjoy, making it an issue of national prestige.

"I do not think technology and science has anything to do with proliferation," Iranian Foreign Minister Mohammad Javad Zarif told Reuters and The International Media Associates, a television production company, in an interview this month.

The meeting in the Austrian capital is the first in an expected series of rounds of negotiations over the coming months aimed at reaching a lasting deal on the permissible scope of Iran's atomic activities in exchange for a lifting of international sanctions that are crippling its economy.

SANCTIONS MAY SLOW CENTRIFUGE DEVELOPMENT

Western states want Iran to roll back its uranium enrichment program to deny it any ability to produce enough highly-enriched for a bomb without the outside world being able to detect it and stop it in time.

To achieve that, experts say, Iran should agree to slash the number of centrifuges it runs and also limit its development of more advanced such machines that spin at supersonic speed to increase the ratio of the fissile isotope.

Dennis Ross, a former Middle East adviser to U.S. President Barack Obama, said he believed Iran should not have more than 10 percent of the 20,000 centrifuges it has installed, of which roughly half are operating.

"That number, moreover, cannot include any next-generation centrifuges, which even now the Iranians are trying to improve with new advances," he wrote in Politico magazine last month.

The issue was a big bone of contention already in talks late last year that yielded a breakthrough, interim agreement under which Iran halted its higher-grade uranium enrichment in exchange for an easing of some sanctions.

The six-month accord - which took effect in January and is designed to buy time for the final settlement talks - says Iran cannot go beyond the existing centrifuge R&D it has been conducting at an above-ground site at Natanz, including testing of four new models.

Iran says it has the means and expertise to build new centrifuges but many nuclear experts believe its push has been held back by sanctions that make it hard for it to obtain the specialized steel and other materials needed.

It alarmed Western powers early last year when it rapidly installed about 1,000 so-called IR-2m centrifuges at the Natanz production facility with the declared intention of starting to operate them to refine uranium, indicating it could assemble at least some such equipment despite the trade restrictions.

But Iran agreed in its November 24 deal with the powers not to start them up and it remains unclear how well they would run.

However, ISIS, the U.S. think-tank, said the interim agreement allowed Iran to continue the development of centrifuges which are much more efficient than the IR-1.

"A centrifuge 10 times more capable than the IR-1 centrifuge would require 10 times fewer centrifuges to make the same amount of weapon-grade uranium for nuclear weapons, allowing for much smaller facilities," ISIS said.

(Additional reporting by Parisa Hafezi; Editing by Mark Heinrich)