Iran and six world powers appeared closer on Friday towards clinching an elusive interim deal under which Tehran would curb its contested nuclear program, with diplomats saying a major sticking point may have been overcome.
A compromise deal over Iran's insistence that its "right" to enrich uranium be internationally recognized has been proposed, they said, possibly opening the way to a breakthrough in intensive negotiations that began in Geneva on Wednesday.
The United States and other Western powers say there is no such thing as a right to enrich - a process that can yield both electricity and nuclear bombs - but Iran views it as a matter of national sovereignty and crucial to any deal that would resolve a decade-old standoff over its nuclear intentions.
The Islamic Republic also wants relief from economic sanctions in return for any nuclear concessions that could allay the West's suspicions that its nuclear fuel-making program has military rather than its stated civilian goals.
In another sign the sides could be edging towards an agreement, Western diplomats said U.S. Secretary of State John Kerry was tentatively planning to join the high-stakes talks in Switzerland although he had yet to confirm his plans.
Russian Foreign Minister Sergei Lavrov arrived in Geneva on Friday evening and planned to participate, spokeswoman Maria Zakharova said. "I can confirm that we are staying Friday and Saturday. That is the plan," she told reporters. Zakharova did not rule out Lavrov staying even longer.
Foreign ministers from the six nations negotiating with Iran - the United States, Russia, China, France, Britain and Germany - waded into the previous talks on November 7-9 and came close to winning concessions from Iran which they count on to reduce the risk of Iran honing a nuclear weapons capability.
In the days running up to the talks, policymakers from the six powers said an interim accord on confidence-building steps could be within reach to start a cautious process of detente with Iran and douse the specter of a wider Middle East war.
Under discussion is Iranian suspension of some sensitive nuclear activities, above all medium-level uranium enrichment, in exchange for sanctions relief. That could involve releasing some Iranian funds frozen in foreign bank accounts and allowing trade in precious metals, petrochemicals and aircraft parts.
The United States might also agree to relax pressure on other countries not to buy Iranian oil. Tehran has made clear it wants more significant gestures diluting the stifling superstructure of sanctions blocking its lifeblood oil exports and use of the international banking and financial system.
Diplomacy on Tehran's nuclear aspirations has revived remarkably since the election of Hassan Rouhani, a relative moderate, as president in June on promises of winning sanctions relief and diminishing Iran's international isolation.
POLITICALLY CHARGED DETAILS
But the sides have struggled to wrap up a deal, bogged down in politically vexed details and still hampered by a long legacy of mutual mistrust.
Diplomats said new, compromise language of a deal being discussed did not explicitly recognize a right to produce nuclear fuel by any country. "If you speak about the right to a peaceful nuclear program that's open to interpretation," a diplomat told Reuters without elaborating.
No other details were available, but Iranian Foreign Minister Mohammad Javad Zarif, Tehran's chief negotiator, said earlier in the day that significant headway had been made.
"We are negotiating our differences and we have made considerable progress," he said. "In some cases we have had results ... but still we have three, four differences."
The fate of Iran's Arak heavy-water reactor project - a potential source of an alternative bomb material, plutonium - and the extent of sanctions relief were among the other stumbling blocks, diplomats said.
The OPEC producer rejects suspicions it is covertly trying to develop the means to produce nuclear weapons, saying it is stockpiling nuclear material for future atomic power plants.
Asked whether he believed there would be an agreement this week, Russian Deputy Foreign Minister Sergei Ryabkov said: "I think it's a possibility. It's not final yet. I'm always optimistic. It depends on many factors."
IRAN SEES "EXCESSIVE DEMANDS"
A senior European diplomat told reporters earlier that foreign ministers of the six states would come to Geneva only if there was a deal to sign. "We have made progress, including core issues," the diplomat said, adding that "there are four or five things still on the table" that need to be resolved.
Zarif and European Union foreign policy chief Catherine Ashton, who is coordinating the talks on behalf of the five permanent members of the U.N. Security Council plus Germany, met throughout the day on Friday to explore ways to narrow differences on the outstanding sticking points.
There was no immediate word on what was the outcome of their meetings; Ashton's spokesman only described the meeting as "useful". But one Iranian delegate said "this morning's session was better than the one last night".
A senior Western diplomat said late on Thursday it would "not be a tragedy" if the third round of Geneva talks within a month adjourned without a deal and reconvened in a few weeks for another try.
ISRAEL FEARS "DAMAGING" AGREEMENT
Israel continued its public campaign of criticizing the offer of sanctions rollbacks for Iran, voicing its conviction that all it would achieve would be more time for Iran to master nuclear technology and amass potential bomb fuel.
"We think it's not a useful agreement, perhaps even damaging," Deputy Foreign Minister Ze'ev Elkin told Israel Radio. "Even those who support the agreement say the only goal of the agreement is to play for time."
He appeared to be referring to France, which has taken a harder line than other Western powers and repeatedly urged the six-power group not to make too many compromises with Tehran.
For the powers, an interim deal would mandate a halt to Iran's enrichment of uranium to a purity of 20 percent - a major technical step towards the bomb threshold, more sweeping U.N. nuclear inspections in Iran and an Arak reactor shutdown.
The United States has only limited flexibility during the talks, however, because of skepticism in U.S. Congress about the benefits of cutting any deal with Tehran.
U.S. Senate Majority Leader Harry Reid said on Thursday he was committed to pursuing a tougher Iran sanctions bill when the Senate returns from a recess early next month - even though President Barack Obama has warned that could derail diplomacy in Geneva.
The White House said on Friday it hoped a deal can be reached in Geneva. If a preliminary agreement is reached for a six-month suspension of some of Iran's most sensitive nuclear activity, the six powers and Tehran will use that time to hammer out a broader and longer-term accord.
Additional reporting by Justyna Pawlak, Fredrik Dahl and John Irish in Geneva, Marcus George in Dubai, Steve Gutterman in Moscow and Allyn Fisher in Jerusalem; Editing by Mark Heinrich