Iran offers 'compromises' in nuclear talks, West unmoved

(Reuters) - Iran is pushing what it portrays as a new compromise proposal in nuclear talks, but Western negotiators say it offers no viable concessions, underscoring how far apart the two sides are as they enter crunch time before a Nov. 24 deadline.

In the negotiations with six major powers, the Iranians say they are no longer demanding a total end to economic sanctions in return for curbing their nuclear program and would accept initially lifting just the latest, most damaging, sanctions.

Western officials dismiss the proposal as nothing new and say the Iranians have always known that the sanctions could only end gradually - with each measure being suspended and later terminated only after Iranian compliance had been proven.

The officials say that in talks in Vienna they too have offered what they call compromises over demands that Iran limit its nuclear program, but they have been rejected by Tehran.

"The bottom line is that they do not appear willing to limit their enrichment program to a level we would find acceptable," a European diplomat said. "We may have no choice but to extend the talks past November ... It's either that or let the talks collapse."

Under their most recent offer, Iranian officials have told Reuters that Iran's leadership would be satisfied with removing crippling U.S. and European Union energy and banking sanctions imposed in 2012.

They described this as a major stepdown from Iran's consistent calls for the removal of all sanctions imposed on the Islamic Republic because of its refusal to heed U.N. Security Council demands that it halt uranium enrichment work.

Tehran calls the sanctions unfair and illegal.

COMPROMISE OR NO COMPROMISE?

The proposal by Iranian negotiators in talks with the United States, Britain, France, Germany, Russia and China has the backing of the Iran's supreme leader, Ayatollah Ali Khamenei, Iranian officials say.

"For the other party involved, it might be only a political issue, but for Iran what is in danger is the existence of the establishment if the economic hardship continues," a senior Iranian official said.

Building on a U.N. Security Council sanctions resolution passed in 2010, the United States and EU in 2012 imposed major sanctions against Iranian oil and gas companies and strengthened restrictions on the country's central bank.

Under the U.S. National Defense Authorization Act Section 1245, Washington also forced Iran's major oil customers to greatly reduce their purchases of Iranian oil or face having their banks cut off from the U.S. financial system.

The result has been a sharp drop in Iranian oil revenues, soaring inflation and unemployment and a weak Iranian currency.

"Iran wants to return to the situation before these sanctions were imposed," the Iranian official said. "If agreed, it will help in reaching a compromise by the Nov. 24 deadline."

U.S. officials have made clear they would make swift moves to suspend sanctions if a proper deal with Iran is secured and Tehran complies with it.

"If we get a comprehensive agreement and if Iran complies ... Iran will begin to end its isolation from the world community, because the sanctions in the first instance will be suspended and ultimately lifted," a senior U.S. official said last month. "It will take some time, but they will be lifted."

REDUCING THE CENTRIFUGES

A series of meetings in Vienna last week between U.S. Secretary of State John Kerry, Iran's Foreign Minister Mohammad Javad Zarif and EU foreign policy chief Catherine Ashton failed to break the impasse. Tehran and Washington said they made some progress but much work remained. It is unclear when the next round of talks will start.

One sticking point is the number of centrifuges Iran would be allowed to keep under a deal.

Iranian officials say they would be willing to live with fewer centrifuges provided they were more advanced machines that enrich more uranium at a faster pace. Their goal is to ensure that the volume of uranium they enrich is not reduced as a result of any long-term accord with the six powers.

Western officials say this is not a real compromise.

The United States, France, Britain and Germany would like the number of centrifuges Iran maintains to be in the low thousands, while Tehran wants to keep tens of thousands in operation. It now has about 19,000 installed, of which about 10,000 are spinning to refine uranium.