Iran's Khamenei Hints Ready To Accept Fair Nuclear Deal As Talks Proceed

(Reuters) - Iran's paramount leader suggested on Sunday he could back a fair nuclear accord with world powers in which neither side got everything it wanted, boosting Iranian negotiators under fire from hardliners at home opposed to rapprochement with the West.

"I would go along with any agreement that could be made. Of course, I am not for a bad deal. No agreement is better than an agreement which runs contrary to our nation's interests," clerical Supreme Leader Ayatollah Ali Khamenei said in a statement issued by his office carried by ISNA news agency.

But in a message that appeared to back up the conciliatory approach of President Hassan Rouhani, who revived diplomacy with Western powers soon after his landslide election in 2013, Khamenei said: "As the president (has) said, negotiations mean reaching a common point. Therefore, the other party ... should not expect its illogical expectations to be materialized.

"This means that one side would not end up getting all it wants," said Khamenei, in office since 1989 and long known for his rejectionist stances against detente with the West until he cleared Rouhani to try to end the long-running nuclear dispute with the West, which has cost Iran international isolation.

However, Khamenei, in a remark apparently meant to keep powerful hardline loyalists on side, reiterated: "The Iranian nation will not accept any excessive demands and illogical behavior."

The West suspects Iran of covertly seeking a nuclear weapons capability instead of, as the major oil producer maintains, an alternative civilian energy source through its enrichment of uranium. Iran denies having any nuclear arms agenda.

A comprehensive nuclear deal is seen as crucial to reducing the risk of a wider Middle East war, at a time when Iran is deeply involved in conflicts in Syria and Iraq. After nearly a year of talks, negotiators failed for the second time in November to meet a self-imposed deadline for an agreement.

Khamenei added that he "firmly" backed a continuation of the negotiations and called for a single-stage, "detailed" agreement - suggesting Tehran still wanted sanctions lifted swiftly rather than gradually as the powers want.

His comments coincided with a series of meetings between Iranian Foreign Minister Mohammad Javad Zarif and top diplomats from the United States, Russia, China, Britain, France and France at the annual high-profile Munich Security Conference.

Zarif described this as a "very serious discussion.”

Negotiators have set a June 30 final deadline for a deal to end the 12-year stand-off over Tehran's nuclear ambitions and limit its nuclear program in exchange for lifting sanctions, after giving themselves a seven-month extension last November.

Western officials said they aim to agree on the substance of a final accord by March but that more time would be needed to reach a consensus on crucial technical details.

Major sticking points continue to be the pace at which sanctions would be removed, the size of Iran's nuclear fuel-producing capacity - a key consideration in preventing any output of bomb material - and the length of any agreement.

"Our (nuclear) negotiators are trying to take the weapon of sanctions away from the enemy. If they can, so much the better. If they fail, everyone should know there are many ways at our disposal to dull this weapon," said Khamenei.

Khamenei, who holds the highest office in the Islamic Republic with powers to overrule laws, has taken a skeptical stand on the nuclear talks. But he has also repeatedly endorsed Rouhani's course on ending the economically crippling nuclear stand-off against harsh criticism from hardliners in parliament, the Shi'ite clergy and the powerful Revolutionary Guards.

Tehran and Washington severed diplomatic relations after Iran's 1979 Islamic Revolution, but later restored tentative direct contact on specific issues such as the wars in Afghanistan and Iraq and more recently as part of bilateral consultations to help settle the 12-year nuclear dispute.

Separately, Zarif denied on Sunday a Reuters report quoting unidentified senior Iranian officials that he had told the United States during the talks that Rouhani's political clout would be heavily damaged if negotiations failed.

Like Khamenei, Zarif insisted on the need to scrap the sanctions, saying they were not an "asset" in negotiations.

"Sanctions are a liability. You need to get rid of them if you want a solution," he told the Munich gathering.

Israel, which sees Iran's nuclear aspirations as a mortal threat, promised to do everything in its power to thwart what Prime Minister Benjamin Netanyahu warned would be a "bad and dangerous agreement" from Israel's point of view.

"World powers and Iran are charging ahead to an agreement that would allow Iran to arm itself with nuclear weaponry, something that would imperil the existence of the State of Israel," Netanyahu told his weekly cabinet meeting.

U.S. Senator John McCain, a hawkish Republican, warned in Munich that while Iran was negotiating now, its underlying goal was "to drive Western influence out of the Middle East.”

(Additional reporting by Stephen Brown and Noah Barkin in Munich, Dan Williams in Jerusalem and Parisa Hafezi in Ankara; Writing by Stephen Brown; Editing by Mark Heinrich)