UPDATE 1-Iran says progress made in nuclear talks but key issues remain

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By Parisa Hafezi and John Irish

DUBAI, May 31 (Reuters) - Iran and six world powers have made significant progress in talks to revive their 2015 nuclear deal but important issues still need to be resolved, the Iranian Foreign Ministry spokesman said on Monday.

Iran and the powers have negotiated in Vienna since April to work out steps that Tehran and Washington must take on sanctions and nuclear activities to return to full compliance with the nuclear pact.

"Each round of talks in Vienna could have been the final round. We should not rush. We have made significant progress but key issues remain," Saeed Khatibzadeh told a televised weekly news conference. "There is no stalemate in the talks."

After former U.S. President Donald Trump ditched the deal three years ago and reimposed sanctions on Iran, Tehran has been rebuilding stockpiles of enriched uranium, enriching it to higher levels of fissile purity and installing advanced centrifuges to speed up production.

Iran's top nuclear negotiator doubted that the talks would be the final round, and the delegations might need to return to their capitals for consultations.

"The negotiations are very complex and we have now reached the main issues of dispute," Abbas Araqchi, told state TV from Vienna.

Iran's reversal of its various breaches of the deal, and its enrichment with advanced centrifuges and production of uranium metal, are some of the remaining issues, according to sources familiar with the talks.

U.S. President Joe Biden has said Washington will return to the pact if Tehran first resumes compliance with its strict limits on uranium enrichment, a potential pathway to nuclear bombs.

"All sanctions should be lifted and then it should be verified by Iran ... then we will reverse our nuclear steps," Khatibzadeh said.

In looking for a path back to the accord, Washington is tiptoeing through a minefield laid by Trump. Iran-related sanctions have been imposed on more than 700 entities and people, according to a Reuters tally of U.S. Treasury actions.

Iran demands all sanctions imposed under Trump - those tied to its nuclear programme, and non-nuclear penalties such as those linked to terrorism, missile development and human rights - should be rolled back.

"This is one of the key issues that has slowed down the talks. All sanctions, whether nuclear or non-nuclear, imposed by Trump should be lifted," an Iranian official told Reuters.

Trump blacklisted about two dozen institutions vital to Iran's economy, including its central bank and national oil company, using U.S. laws designed to punish foreign actors for supporting terrorism or weapons proliferation.

His decision to blacklist Iran's elite Revolutionary Guards (IRGC), and its Quds Force foreign paramilitary and espionage arm, as a Foreign Terrorist Organization has also complicated matters.

The IRGC also an industrial empire whose political influence is expected to grow after Iran's June presidential election, when a hardline president close to the elite force is expected to win.

(Additional reporting by Francois Murphy in Vienna and Arshad Mohammed in Washington Writing by Parisa Hafezi; Editing by Angus MacSwan and Giles Elgood)

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