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Iran Readies Offer to Limit Its Nuclear Program – WSJ.com.

By  JAY SOLOMON

Iran is preparing a package of proposals to halt production of near-weapons-grade nuclear fuel, a key demand of the U.S. and other global powers, according to officials briefed on diplomacy ahead of talks in Geneva next week.

Tehran in return will request that the U.S. and European Union begin scaling back sanctions that have left it largely frozen out of the international financial system and isolated its oil industry, the officials said.

The package from the new government of President Hasan Rouhani could revitalize long-stalled negotiations over Iran’s nuclear program and underpin an emerging diplomatic thaw between Washington and Tehran.

But it also stands to test the unity of the U.S. and other international powers meeting with Iranian diplomats in Geneva in a bid to reach an accord to curtail Iran’s nuclear work.

By falling short of a complete shutdown of enrichment, the anticipated Iranian offer could divide the U.S. from its closest Middle East allies, particularly Israel, Saudi Arabia and the United Arab Emirates, who have cautioned the White House against moving too quickly to improve ties with Tehran, according to American and Mideast officials.

In an opening salvo in the negotiations, Tehran is expected to offer to stop enriching uranium to levels of 20% purity, which international powers consider dangerously close to a weapons-grade capability.

Iran is also expected to offer to open the country’s nuclear facilities to more intrusive international inspections, the officials said. And Iran is considering offering the closure of an underground uranium-enrichment facility near the holy city of Qom, which the U.S. and Israel have charged is part of a covert Iranian weapons program, which Tehran denies.

The international diplomatic bloc negotiating with Tehran, which comprises the five permanent members of the United Nations Security Council, plus Germany, last met with Iran in early April, two months before Mr. Rouhani’s surprise electoral victory.

The group of world powers, known as the P5+1, offered at the time to end sanctions on Iran’s petrochemical exports and precious metals trade in return for Tehran suspending its production of 20%-enriched uranium and ceasing activities at the Qom site, known as Fordow.

U.S. and European diplomats said Iran’s previous government never formally responded to the offer.

Russia and China, both P5 members, have pressed the U.S. and the European Union to begin scaling back sanctions on Tehran in an effort to underpin negotiations with Mr. Rouhani’s government.

The U.K., also in the P5, is demanding that Iran take concrete steps to set aside its nuclear ambitions before London dials back sanctions, Foreign Secretary William Hague said on Tuesday—adding, however, that the two countries are taking early steps toward reopening their embassies, which were closed in 2011.

Meanwhile, the U.S. and Iran have intensified direct contacts in recent weeks in a bid to strengthen the diplomacy.

President Barack Obama spoke with Mr. Rouhani in a 15-minute phone call on Sept. 27, the first conversation between an American and Iranian president in more than 30 years.

Iranian Foreign Minister Javad Zarif met for 30 minutes with Secretary of State John Kerry last month in New York. They largely focused on resolving the nuclear dispute, according to U.S. and Iranian officials.

Mr. Zarif will present the package to the P5+1 to kick off what is expected to be an intense new round of negotiations, according to these officials. He has said Tehran’s new government wants to resume talks with a clean slate, and offered during meetings in New York to bring a new package when the next round begins in Geneva on Oct. 15, according to Iranian and U.S. officials.

Iran’s top diplomat has declined to publicly outline his road map. But Western officials who met his delegation said the plan would focus on stopping the production of uranium enriched to 20% purity while agreeing to ship Iran’s stockpile of the nuclear fuel to a third country for storage.

In return, Iran will seek to obtain from the international market the fuel rods needed to power the country’s research reactor in Tehran.

Less certain, said the officials briefed on the diplomacy, is whether Mr. Zarif will offer in Geneva to suspend or end nuclear-fuel production at Qom.

Israel has repeatedly threatened to bomb the site because it believes the underground facility is designed to produce highly enriched uranium for bombs. The site is controlled by Iran’s elite military unit, the Islamic Revolutionary Guard Corps, which U.S. officials aren’t certain Iran’s diplomats can control.

Messrs. Rouhani and Zarif have stressed in recent weeks that Iran won’t agree to suspend all of its nuclear-fuel production—a program that includes the enrichment of uranium to levels between 3% and 5% purity. This fuel is usable for power reactors but isn’t suitable for weapons.

Israeli Prime Minister Benjamin Netanyahu told the U.N. General Assembly last week that his country wouldn’t accept Iran maintaining the ability to enrich uranium at any level, due to concerns it would still maintain the latent ability to produce weapons-grade fuel.

Senior Obama administration officials have refused to say whether the U.S. would accept Iran maintaining the ability to enrich uranium on its soil.

“I’m not going to negotiate in public,” the Obama administration’s chief Iran negotiator, Undersecretary of State Wendy Sherman, told a Senate hearing last week. “All I can do is repeat what the president of the United States has said: We respect the right of the Iranian people to access peaceful nuclear energy.”

A potential stumbling for the Geneva negotiations is the status of Iran’s heavy water reactor in the city of Arak, which Washington believes offers Tehran a second route to develop atomic weapons.

Iran has notified U.N. nuclear inspectors that it hopes to begin operating the Arak reactor by the second half of 2014. At that point, the facility would begin producing roughly two bombs’ worth of weapons-grade plutonium per year.

The status of Arak has only briefly been raised in previous negotiations between the P5+1 and Iran, according to U.S. and European officials. But the reactor has become of increasing concern to the U.S., U.N. and Israel as its operational date draws closer.

Mr. Zarif has said that his government is committed to bringing more transparency to its nuclear program. Among the steps Tehran is expected to offer in Geneva is allowing the U.N.’s nuclear watchdog, the International Atomic Energy Agency, greater access to Iran’s sites and the ability to call more snap inspections.

It is unclear, these officials said, if Iran will open up some of the purely military sites that the IAEA has said may have been used to test nuclear-weapons technologies in recent years. The agency has repeatedly been blocked from visiting the Parchin military base south of Tehran.

Negotiations will need to show quick results to counter domestic opposition to the talks in both Washington and Tehran, U.S. and Iranian officials say.

In the U.S., Congress is set to impose new sanctions on Iran that seek to enforce a total ban on oil exports and further block Tehran’s ability to conduct international trade.

Ms. Sherman pressed Congress last week to hold back on enacting the sanctions until the U.S. can test Mr. Rouhani’s new negotiating team. But a number of leading lawmakers, both Democrats and Republicans, said Washington should continue to increase the financial pressure until Iran cuts a deal.

“The State Department should not aid and abet a European appeasement policy by pressuring the Senate to delay sanctions while the world’s leading sponsor of terrorism races toward a nuclear weapons capability,” said Sen. Mark Kirk (R., Ill.) last week.

Conservative leaders in Iran, particularly leaders of the Revolutionary Guards, already have attacked the diplomatic efforts of Messrs. Rouhani and Zarif. The foreign minister told American leaders in recent days that the window for negotiations is somewhat limited, according to Sen. Dianne Feinstein (D., Calif.), who met with Mr. Zarif in New York.

“There are people in Iran, just as there are people here, who would not want to see an agreement,” Ms. Feinstein said.

—Siobhan Gorman contributed to this article.

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