US, Iran Say Major Disputes Remain In Vienna Nuclear Talks

(Reuters) - U.S. Secretary of State John Kerry said on Sunday major differences persist between Iran and six world powers negotiating on Tehran's nuclear program, remarks echoed by Tehran, with a July 20 deadline for a deal approaching.

The United States, Britain, France, Germany, Russia and China want Iran to reduce its nuclear fuel-making capacity to deny it any means of quickly producing atom bombs. In exchange, international sanctions that have crippled the large OPEC member's oil-dependent economy would gradually be lifted.

Iran says it is enriching uranium for peaceful energy purposes only and wants the sanctions removed swiftly. But a history of hiding sensitive nuclear work from U.N. inspectors raised international suspicions and the risk of a new Middle East war if diplomacy fails to yield a long-term settlement.

"Obviously we have some very significant gaps still, so we need to see if we can make some progress," Kerry said ahead of meetings with European Union foreign policy chief Catherine Ashton and other EU foreign ministers who flew into the Austrian capital at the weekend to kick-start the faltering talks.

Iranian Deputy Foreign Minister Abbas Araqchi delivered a similar message. He was quoted by Iran's Arabic language al-Alam television as saying that "disputes over all major and important issues still remain. We have not been able to narrow the gaps on major issues and it is not clear whether we can do it."

Kerry arrived in Vienna in the early hours after clinching a deal in Kabul with Afghanistan's presidential candidates to end the country's election crisis.

"It is vital to make certain that Iran is not going to develop a nuclear weapon and that their program is peaceful and that's what we're here to try and achieve and I hope we can make some progress," Kerry said in Vienna.

NEITHER PESSIMISTIC NOR OPTIMISTIC

Araqchi said that he was "not pessimistic but also not very optimistic" about prospects for an agreement ahead of the self-imposed deadline. "No proposal has been accepted yet. We have not reached any agreement over the enrichment (program of Iran) and its capacity."

He added that if the talks collapsed, Iran would resume higher-level enrichment that it suspended on Jan. 20 when a preliminary accord the sides struck two months before took effect. Iran won limited relief from sanctions in return.

Iran says it is refining uranium to low levels of fissile purity to fuel a planned network of nuclear power stations. It earlier described its higher-level - or 20 percent purity - enrichment as material to fuel a medical research reactor. High-enriched uranium - or 90 percent - is for nuclear weapons.

Given the chasm in negotiating positions, some diplomats and experts believe the negotiations may need to be extended.

The Nov. 24 deal included a provision for lengthening talks on a permanent agreement by up to six months if all sides agree. Araqchi said "there is a possibility of extending the talks for a few days or a few weeks if progress is made."

However, a senior U.S. official said on Saturday an extension would be hard to consider without first seeing "significant progress on key issues".

"If (a comprehensive agreement) can't happen by July 20 both the (U.S.) administration and Congress are on the same page, which is that we obviously have to consider all of our options," said the official, who requested anonymity.

The French, British and German foreign ministers joined Kerry and Ashton in Vienna.

Their Russian and Chinese counterparts will not attend due to a meeting of the so-called BRICS developing countries - Brazil, Russia, India, China and South Africa. But Moscow and Beijing sent senior diplomats to Vienna for Sunday's talks.