Iranian President Hassan Rouhani urged the United States to "retreat from all illegal, unjust and wrong sanctions"
Iranian President Hassan Rouhani urged the United States to "retreat from all illegal, unjust and wrong sanctions" Iranian Presidency / -

President Hassan Rouhani on Tuesday told the United States to "take the first step" by lifting all sanctions against Iran, dampening down the likelihood of meeting US counterpart Donald Trump.

Foreign Minister Mohammad Javad Zarif said the prospects for such a meeting were "unimaginable" even if the United States rejoins a landmark nuclear deal with Iran.

Trump had said less than 24 hours earlier he was ready to meet with Rouhani within weeks, in a potential breakthrough reached during a G7 summit in the French seaside resort of Biarritz.

Iran's economy has been battered by US sanctions imposed since Trump in May last year unilaterally withdrew from the 2015 nuclear deal between the Islamic republic and world powers.

"You must retreat from all illegal, unjust and wrong sanctions against the nation of Iran," Rouhani said.

"The key for positive change is in the hands of Washington," he said, because Iran had already ruled out ever doing what worries the US the most -- building an atomic bomb.

"This concern has already been removed" through a fatwa issued in 2003 by supreme leader Ayatollah Ali Khamenei, he added.

"We don't (intend to) make an atomic bomb... our military doctrine is based on conventional arms," said Rouhani.

"So take the first step. Without this step, this lock will not be unlocked."

Meeting 'unimaginable'

In Biarritz, French President Emmanuel Macron had said the "conditions for a meeting" between Trump and Rouhani "in the next few weeks" had been created through intensive diplomacy.

Trump said he "would certainly agree to that" and that the timeline proposed by Macron was realistic.

The US leader was equally confident that Rouhani would be in favour.

"I think he's going to want to meet. I think Iran wants to get this situation straightened out," he added.

News of the potential meeting was welcomed by financial markets.

"Expectations are ... rising that tensions in the Gulf can be de-escalated following President Macron's overtures to broker a meeting between Donald Trump and his Iranian counterpart," noted AxiTrader analyst James Hughes.

The rial was higher at about 112,000 to the dollar, up from 117,500 a week ago under the unofficial rate in Iran's capital, according to the Bonbast website that monitors exchange rates.

But Zarif said Tuesday he had made it known at the G7 summit that a meeting between Rouhani and Trump would be highly improbable even if the Americans returned to the nuclear deal.

"On my trip to Biarritz I said that a meeting between Iran's president and Trump is not imaginable" until America rejoins the nuclear pact, said Zarif.

"Even at that time, we will not have a bilateral negotiation," he added.

No photo opportunity

Rouhani has indicated he is open to holding talks with the Americans, but it is an approach that has faced criticism from ultra-conservatives.

In his speech Tuesday, he said his government's policy of "constructive interaction" with the world was in line with Khamenei's approach of "extensive interaction".

But he stressed the US had to "retreat from their mistakes" and return to its commitments under the nuclear deal.

"Our path is clear if they come back to their commitments, we too will fully act on our commitments. If they do not come back to their commitments, we will continue our path," said Rouhani.

But the Iranian president said he was not just looking for photo opportunities.

"We seek to resolve issues and problems in a rational way but we are not after photos. For anyone wanting to take a picture with Hassan Rouhani, this is not possible," he said.

People on Tehran's streets expressed doubts over the possible benefits of any meeting between Rouhani and Trump.

"I believe there's no point in negotiating with America," said Valiollah Tavakoli, a self-employed man from the capital, adding there was little to show from the nuclear talks.

"People's situation got worse and worse every day. So as the supreme leader said, negotiation with America is useless."

The possible meeting between Rouhani and Trump was blasted as a photo opportunity Tuesday on the front page of the Javan newspaper close to Iran's Revolutionary Guards.

Both Rouhani and Trump are scheduled to be in New York for the UN General Assembly at the end of September which could provide a stage for talks.