Iran and six world powers are making little progress in arduous talks on ending their dispute over Tehran's nuclear program, a senior U.S. official said on Friday, fanning doubt about the prospects for a breakthrough by a self-imposed July deadline.
Tehran also said the latest round of negotiations, which began in Vienna on Wednesday and were expected to end later on Friday, were difficult and slow.
The powers want Iran to agree to scale back uranium enrichment and other sensitive nuclear activity and accept more rigorous U.N. inspections to deny it any capability of quickly producing atomic bombs, in exchange for an end to economic sanctions. Tehran denies having any such underlying ambition, saying its nuclear program is for civilian energy only.
After three months of mostly comparing expectations rather than negotiating viable compromises, the sides planned at the May 13-16 meeting to start drafting the text of a final agreement that could end many years of enmity and mistrust and dispel fears of a devastating, wider Middle East war.
Both sides made clear on Friday this was an uphill struggle.
"The West should avoid having excessive demands," an Iranian source close to the country's negotiating team was quoted as saying by the semi-official Fars News Agency. "The Iranian nation has shown that pressure on them always backfires."
The U.S. official, who declined to be named, said: "Talks have been slow and difficult. Significant gaps remain. Iran still has some hard decisions to make. We're concerned that progress is not being made and that time is short."
The U.S. and Iranian statements might be designed in part to raise pressure on the other side but they also betrayed stubbornly deep differences that must be overcome if intense diplomacy is to succeed in clinching a final accord.
Still, the atmosphere remained businesslike enough for Iranian-U.S. bilateral talks that lasted over two hours. Such meetings, once almost unimaginable, have become more common as the two foes have sought to re-establish official communications channels closed since Iran's 1979 Islamic Revolution.
This week's Vienna gathering was the fourth round of negotiations between Iran and the United States, France, Germany, Britain, China and Russia since February with the goal of a long-term deal by July 20.
Diplomats have disclosed that some headway was made during the previous three rounds on one of the thorniest issues - the future of Iran's planned Arak heavy-water reactor. The West worries it could prove a source of plutonium for nuclear bombs once operational but Iran has offered to alter its configuration so that any plutonium output would be minimal and insignificant.
But diplomats say positions remain far apart on the issue of pivotal concern for the West: Iran's capacity to refine uranium, which can be used to generate electricity but also, if processed to a high degree, provides material that detonates an atom bomb.
The Islamic state says it wants to expand the number of centrifuges it has refining uranium, maintaining that it needs them to fuel a future network of nuclear power stations.
That is unacceptable for the United States and its allies, concerned that the same activity can be put to building bombs. They want Tehran to instead significantly reduce the number of centrifuges - roughly 10,000 - it now operates.
DESPITE SLOW TALKS, ATMOSPHERE IS "GOOD"
Iran rules out shutting any of its nuclear facilities, which it regards as synonymous with national pride and achievement. Its priority for any deal is an end of international sanctions that have severely damaged its oil-reliant economy.
Other big points of contention include the duration of any limitations of Iran's atomic activities and the speed of lifting sanctions, as well as whether any agreement should cover the future scope of its ballistic missile program.
On Wednesday, the first day of this week's meeting, the U.S. delegation made clear that it wanted to discuss both Iran's ballistic missile program and possible military dimensions of its past nuclear research.
But in a sign of the wide divergence between the U.S. and Iranian positions, Iranian Foreign Minister Mohammad Javad Zarif merely laughed and ignored the remarks, according to an Iranian official present. An American official declined to comment, but referred to remarks from a senior U.S. official earlier this week, who said "every issue" must be resolved.
Shadowing the background of the talks have been threats by Israel, widely believed to have the Middle East's only nuclear weaponry but which sees Iran as a existential threat, to attack Iranian nuclear installations if it deems diplomacy ultimately futile in containing Tehran's atomic abilities and potential.
Israel on Friday cited a U.N. Panel of Experts report obtained by Reuters that said Tehran was pressing ahead with its ballistic missile program in violation of U.N. sanctions, complicating the nuclear talks.
U.S. President Barack Obama has not ruled the last-ditch option of military action either. Iran says it would hit back hard if it were attacked.
Additional reporting by Louis Charbonneau and Parisa Hafezi; Editing by Mark Heinrich