VIENNA - High-stakes talks between Iran and big powers that stalled Tuesday will resume Wednesday and the U.N. nuclear watchdog chief said a deal was still in reach to help allay concerns about Tehran's nuclear program.

The multilateral talks, which began Monday, faltered after Iran said it would not agree to curb uranium enrichment, something seen by the powers as essential to make any accord work, and warned France could not be part of a deal.

I believe we are making progress. It is maybe slower than I expected. But we are moving forward and we are going to meet tomorrow at 10 a.m. (9 a.m. British time), International Atomic Energy Agency chief Mohamed ElBaradei told reporters.

ElBaradei said some headway was made in separate bilateral consultations involving Iran, France, Russia and the United States and a deal remained within reach.

It's a complex process as you understand. There is the technical aspect, many technical issues that we have to analyse. There is of course a question of confidence-building guarantees, he said, apparently referring to Iran.

The negotiations, presided over by ElBaradei, offered the first chance to build on a tentative agreement reached on October 1 to defuse a long standoff over fears Iran's stockpiling of enriched uranium is a latent quest to develop atomic bombs.

At those talks in Geneva, Western diplomats said, Iran agreed in principle to send most of its low-enriched uranium to Russia and France for further refinement. This would be converted into fuel rods to replenish dwindling fuel stocks of a Tehran reactor that makes radio-isotopes for cancer care.

ElBaradei spoke after a brief reunion of all parties in the closed meeting hall. He left without taking questions.

The (consultations) have been constructive and the meeting 'with all countries concerned will continue tomorrow, Iran's IAEA ambassador, Ali Asghar Soltanieh, told reporters.
The multilateral gathering did not resume Tuesday after Tehran suddenly refused to deal directly with France.

Iranian Foreign Minister Manouchehr Mottaki and other officials in Tehran accused Paris of reneging on contracts to deliver nuclear materials in the past.

FACE-SAVING COMPROMISE

Diplomats familiar with the talks said the parties were considering a face-saving compromise drafted by the IAEA. Under this, Iran would sign a contract with Russia which would then would sub-contract further work to France.

Other tough issues to settle included how much low-enriched uranium (LEU) Iran would send out, and when. Western powers wanted this to be 75 percent of its declared stockpile, and to be shipped abroad in one consignment before the end of the year.

Iran has yet to respond publicly to the proposal, raising Western concerns it was playing for time as it has in the past.

The West hopes that farming out a large amount of Iran's LEU reserve for reprocessing into fuel for the medical isotope reactor -- using technology Iran lacks -- will minimise the risk of Iran refining the material to high purity suitable for bombs.

Western diplomats say Tehran must ultimately curb the program to dispel fears of a growing LEU stockpile being further enriched, covertly, to produce nuclear weapons.

But Mottaki said Iran would not curtail enrichment as part of any LEU deal. Iran will continue its uranium enrichment. It is not linked to buying fuel from abroad, he said.
The meetings with world powers and their behaviour shows that Iran's right to have peaceful nuclear technology has been accepted by them. Iran will never abandon its legal and obvious right, he said, alluding to unheeded U.N. Security Council resolutions since 2006 demanding that Tehran suspend enrichment.

LEU is used as fuel for nuclear reactors, while a nuclear bomb requires highly enriched uranium. The West fears Iran's declared civilian nuclear energy program is a front for producing fissile material for atomic bombs. Iran denies this.

Mottaki said Iran did not need France for the fuel plan.

There are Russia, America ... I believe these countries are enough, he said. France, based on its shortcomings to fulfil its obligations in the past, is not a trustworthy party to provide fuel for Iran.

Iran has been hit by three rounds of U.N. sanctions for refusing to halt enrichment-related work. It said Monday it would not hesitate to produce higher enriched uranium on its territory if the talks failed in Vienna.

Iran won a reprieve from harsher sanctions by agreeing on October 1 to IAEA inspections of a hitherto hidden enrichment site and to sending low-enriched uranium abroad for conversion.

(Additional reporting by Sylvia Westall in Vienn and Parisa Hafezi in Tehran; Editing by Jon Hemming)

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