World powers, Iran to activate landmark nuke deal

BRUSSELS/VIENNA - World powers and Iran are due to start implementing a landmark deal on Monday curbing Tehran's nuclear programme, amid hopes that it will pave the way for a broad settlement of a decade-old standoff and ease fears of a new Middle East war.

If, as expected, the United Nations' nuclear watchdog confirms in the morning that Iran is meeting its end of the agreement, the European Union and the United States will later in the day suspend some economic sanctions in return.

Iran said it expected to suspend its higher-grade uranium enrichment around noon local time (0830 GMT), when talks with the International Atomic Energy Agency (IAEA) are likely to have ended, the country's Fars news agency reported.

The mutual concessions are scheduled to last six months, during which time six powers - the United States, Russia, China, France, Britain and Germany - aim to negotiate a final accord defining the permissible scope of Iran's nuclear activity.

Western governments want such an agreement to lay to rest their concerns that Iran could produce an atomic weapon. Tehran is seeking an end to painful economic sanctions that have severely damaged its oil-dependent economy.

The interim accord, struck on November 24 after years of on-off diplomacy, marks the first time in a decade that Tehran has limited its nuclear work, which it says has no military goals, and the first time the West has eased economic pressure on Iran.

"It is an important agreement and I hope that this will now give us an opportunity to move forward and to look at a more comprehensive agreement shortly," EU foreign policy chief Catherine Ashton said.

Ashton coordinates diplomatic contacts with Iran on behalf of the six nations and plans to visit Tehran in the coming weeks as part of her effort to bring an end to the nuclear dispute.

Under the deal, Iran is obligated to suspend enrichment of uranium to a fissile concentration of 20 percent, a short technical step away from the level needed for nuclear weapons.

It also has to dilute or convert its pile of this higher-grade uranium, and cease work on the Arak heavy water reactor, which could provide plutonium for bombs.

In return, it will be able to retrieve $4.2 billion in oil revenues frozen in overseas accounts, and resume trade in petrochemicals, gold and other precious metals.

The US government estimates the value of sanctions relief in total at about $7 billion, although some diplomats say much will depend on the extent to which Western companies will now seek to re-enter the Iranian market.

Washington has made clear its view that it is premature for industry to start doing business with Iran again, as most of the sanctions remain in place for now.