Iran agreed yesterday to let the United Nations nuclear watchdog restart its long-stalled investigation into suspicions that Tehran has secretly worked on developing nuclear arms.
The International Atomic Energy Agency chief Yukiya Amano made the announcement on the eve of crucial talks in Baghdad between Iran and six world powers, amid growing optimism that the Islamic Republic will agree to stop enriching uranium to a level that could be turned quickly into the fissile core of nuclear arms.
Iran says its nuclear facilities are for energy and medical purposes but the West suspects the technology could be used to manufacture weapons.
After talks in Tehran between Mr Amano and Iran's chief nuclear negotiator Saeed Jalili, "the decision was made … to reach agreement" on the mechanics of giving the IAEA access to sites, scientists and documents it seeks to restart its investigation, Mr Amano said.
After nearly a decade of fruitless on-and-off again bargaining, mistrust runs deep between Iran and the western members of the P5+1 - the United States, Britain, France, Russia and China, plus Germany. But with the stakes higher than ever, both sides have strong incentives for a diplomatic solution and signalled a willingness to compromise in today's talks.
"The atmosphere is probably better than it's been at any point since 2005," said Peter Jenkins, a former British ambassador to the IAEA.
The immediate aim of the P5+1 is for Iran to halt enriching uranium to 20 per cent. This level of purification is in striking distance of producing bomb-grade material. In return, the P5+1 are expected to offer Iran a package of incentives.
But this opening gambit by the P5+1 is likely to fall short of Iran's expectations, in particular by failing to offer any early and significant sanctions relief, analysts said. Even so, they believe Tehran will agree to negotiate over the package and whatever counterproposals Iran puts forward today and in subsequent meetings.
"Baghdad may even be a calculated failure in that both sides, particularly the US, are going to go in with a very hard bargaining position," said Trita Parsi, author of a new book on the diplomacy of Barack Obama, the US president, A Single Roll of the Dice.
"They can risk failure because they know there's going to be another meeting," he said.
Iran wants to stave off sanctions targeting its vital oil and banking sectors, remove the threat of military action and secure formal international acceptance of its right to enrich uranium for peaceful purposes.
Progress in the talks would defuse tensions that could drive up oil prices, imperilling the fragile global economic recovery and Mr Obama's re-election bid.
Israel, the Middle East's only nuclear-armed power, is impatient and mistrustful of the negotiations, repeatedly warning it could take military action against Iran's nuclear facilities if it deems diplomacy to have failed.
Both sides claim to have the upper hand. Western politicians argue sanctions have forced Iran to negotiate while Tehran maintains its adversaries returned to the table because they realise these measures had no impact.
Iranian media report that Tehran will reinforce its message of defiant self-sufficiency today by launching its fourth satellite into orbit: proof the US cannot curb the scientific work of a proudly independent Muslim nation and ancient civilisation.
The IAEA talks are separate from Iran's negotiations with the P5+1, which kicked off in Istanbul in mid-April after a 15-month impasse. But the two tracks are vitally related, with progress on either likely to drive advances on the other.
"This combination means a whole series of issues are now being addressed," said Gary Sick, an Iran expert at Columbia University in New York who was the chief White House aide on issues related to Iran during the 1979 Iranian revolution. "Both sides have a strong rationale for finding an agreement."
The contours of a preliminary deal have long been visible. Iran would stop enriching uranium to 20 per cent, which it insists it is doing only to fuel a medical research reactor, and hand over its stockpile of that material. In return, the West would supply the needed fuel plates.
The P5+1 would also formally accept Iran's enrichment of uranium to 3.5 per cent to fuel civil nuclear reactors, provided Tehran gives verifiable guarantees, including intrusive inspections, that no material is diverted to possible military use. Sanctions would be eased or suspended and eventually lifted.
But the timing and extent of reciprocal measures, as well as technical discussions on the scale and level of Iranian enrichment that the West might accept, are likely to prove very difficult.
"The West will be mistaken if it believes the Iranians can be browbeaten or coerced into conceding whatever the West wants," Mr Jenkins said.
Leading US newspapers have reported that the P5+1 will offer Iran inducements such as forgoing further UN sanctions if there is an agreement on 20 per cent enriched uranium.
But these blandishments will not help Iran to achieve its main goal: getting the West to lift sanctions on its oil and gas industry and central bank, and cancel an EU embargo on Iranian oil imports scheduled to take effect on July 1.
The US believes these measures brought Iran back to the negotiating table and views them as a trump card to play when Tehran makes verifiably substantial concessions.
However, Britain's Guardian newspaper reported last week that the EU could suspend its oil embargo if there is a uranium fuel-swap deal.
Either way, "a process has started that will continue even if there's no breakthrough in Baghdad", Mr Parsi said.
"Both sides are extremely wary. They don't trust each other," said Mr Sick. "These talks have the capacity to build trust, but every time we've had this happen in the past, somebody or something has sabotaged it, sometimes deliberately, sometimes just by chance."
* Additional reporting by the Associated Press
