By Louis Charbonneau
(Reuters) - Iran and six world powers - the United States, Britain, France, Germany, Russia and China - are in what may be the final phase of negotiations aimed at securing a deal on sanctions relief in exchange for limits on Iranian nuclear activities.
The six powers had set themselves a deadline of Tuesday, but diplomats close to the talks expected that to slip.
The nuclear standoff between Iran and the West goes back to at least 2002, when a group of Iranian exiles revealed undeclared Iranian nuclear facilities in Iran.
The International Atomic Energy Agency (IAEA) later confirmed that they were a uranium enrichment plant at Natanz and a heavy-water production plant at Arak. Iran says its nuclear program is peaceful but Western intelligence agencies are convinced that Iran had a nuclear arms program that went dormant, possibly as far back as 2003.
In 2003, Britain, France and Germany struck a deal with Iran to suspend its uranium enrichment program in exchange for economic and political incentives. That deal, which the United States opposed, collapsed in 2005.
In 2006, the U.S. dropped its opposition to engagement with Iran and joined the three European powers, along with Russia and China, in what was then called the "P5+1" - the five permanent U.N. Security Council members plus Germany - or the "E3+3". In the same year, the Security Council began imposing sanctions on Iran for refusing to suspend enrichment and other sensitive nuclear work. This was followed by tougher U.N., U.S. and European Union sanctions.
The P5+1 made several proposals but the process stalled until after President Hassan Rouhani's election in 2013. In November of that year, Iran and the six reached an interim deal that gave Tehran limited sanctions relief in exchange for some curbs on its most sensitive nuclear work. It was meant to buy time to negotiate a final, long-term agreement. The interim deal has been extended twice, in July and November of last year.
On April 2, Iran and the six agreed in Lausanne, Switzerland, on the parameters for a final agreement. They set a deadline for a final, long-term agreement of June 30, though negotiations were expected to run into July.
Israel and Saudi Arabia, Iran's regional foes, are suspicious of Iran and oppose the deal. Iran has become increasingly assertive in the region and analysts believe that, if Iran secures sanctions relief based on a deal with the West, it will boost its confidence as a regional power and improve its flagging economy.
The point of an agreement is to reduce Iran's nuclear "breakout time", the time needed to produce enough highly enriched uranium or bomb-grade plutonium for a single weapon, to at least one year from the current 2-3 months.
Under a law pushed by Republicans suspicious of Iran, ultimately backed by the White House, President Barack Obama's administration will have to submit any agreement struck with Iran to Congress for a 30-day review period, during which Obama will refrain from suspending sanctions during. If Congress receives the text after July 9, the review period will be doubled to 60 days, which negotiators say could be long enough for the deal to unravel.
SANCTIONS RELIEF - U.S., EU and U.N. sanctions will be suspended and later terminated based on verification of Iran's compliance with the agreement, but there are disputes about timing. Khamenei wants sanctions lifted as soon as there is an agreement, though Western powers say they will be suspended gradually and terminated much later.
U.N. nuclear-related sanctions will need to be removed on the basis of a U.N. Security Council resolution, which will also allow Iran to purchase specific nuclear technology that it has been banned for years from acquiring. There would be a "snapback" plan to restore the sanctions if Iran violates the deal.
The six powers also want the resolution to simultaneously reimpose an arms embargo on Iran that is not nuclear-related.
DURATION - If there is a deal, Iranian negotiators agreed in Lausanne that Tehran's uranium enrichment program will be subject to limitations for a period of 15 years, easing gradually after 10. However, Iran's Supreme Leader Ayatollah Ali Khamenei has said Iran would not limit its nuclear activity for as long as 10 years.
CENTRIFUGES - Machines that purify uranium for use in nuclear power plants or weapons. In Lausanne, Iran agreed to reduce its roughly 19,000 centrifuges installed at two enrichment facilities - Natanz and Fordow - to 6,104. Under the deal, only 5,060 of these, those at Natanz, will be active for the first 10 years.
All 6,104 centrifuges are to be first generation IR-1s. Iran also agreed to not enrich uranium beyond 3.67 percent of fissile material for at least 15 years, well below the 90 percent or more needed for weapons, but appropriate for civilian use.
Iran would be prevented from installing further centrifuges for 15 years.
RESEARCH AND DEVELOPMENT - This is one of the more difficult sticking points.
According to a French fact sheet, Tehran would be allowed a "gradual and precisely defined increase in (enrichment) capacity between the 10th and 13th years, with the introduction of advanced IR-2 and IR-4 centrifuges".
Officials close to the talks say that Iran is also pushing to conduct what it describes as research and development with advanced centrifuges in the first 10 years as well, which Western delegations dislike.
MONITORING AND VERIFICATION - Iran and the six have yet to agree on a plan for monitoring and verification of the deal's implementation. The biggest sticking point here is access for International Atomic Energy Agency inspectors to Iranian military sites and nuclear scientists. Iran's Supreme Leader Ayatollah Ali Khamenei has said military sites and scientists are off limits, though Western officials say Iranian negotiators have indicated access would be possible.
URANIUM STOCKPILE - Iran is to reduce its current stockpile of about 8,700 kg of low-enriched uranium (LEU) to 300 kg of 3.67 percent LEU for 15 years. But Iran is unwilling to ship LEU abroad, and wants to convert much of it to a less proliferation-risky form. Officials close to the talks say this issue remains unresolved.
ARAK HEAVY-WATER REACTOR - Iran agreed to redesign and rebuild the Arak heavy-water research reactor based on a design agreed by the six. The idea is that it will not produce bomb-grade plutonium and will focus on peaceful research and medical isotope production. Officials say the redesign has yet to be agreed.
POSSIBLE MILITARY DIMENSIONS ("PMD") - According to the Lausanne agreement, Iran must answer queries the IAEA has about past activities that may have been related to atomic weapons research. But Iran has been stonewalling the IAEA probe, and Western officials have said some of the sanctions relief would depend on Iran resolving those queries.
Recently U.S. Secretary of State John Kerry suggested that the Washington was prepared to let that issue slide, but the State Department said that was not the case. U.S. and other Western officials said Kerry had called Iranian Foreign Minister Mohammad Javad Zarif and told him that PMD questions must be resolved.
(Compiled by Louis Charbonneau; Editing by Kevin Liffey)