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 The future of the Arak plant is among several sticking points that
Iran and six world powers need to resolve if they are to reach a
deal by late July on limiting the country's disputed nuclear
programme in exchange for an end to sanctions.
The main stumbling block is the permissible scope of uranium
enrichment in Iran. The lack of progress in bridging negotiating
gaps has left the self-imposed July 20 deadline for a long-term
settlement looking increasingly unrealistic, and Iran has said a
six-month extension of the talks may be necessary.
The West is worried that Arak, once operational, could provide a
supply of plutonium - one of two materials, along with highly
enriched uranium, that can trigger a nuclear explosion.
Iran says the 40-megawatt Arak reactor is intended to produce
isotopes for cancer and other medical treatments. It agreed to halt
installation work at Arak under a six-month interim deal struck with
the powers last November that was geared to buy time for
negotiations on a comprehensive accord.
 After the latest round of talks in Vienna in May, a diplomat from
one of the powers said Iran had appeared to row back on its previous
openness to address Western fears about the nuclear weapons
potential of Arak. Iran has since dismissed as "ridiculous" one
mooted solution to such worries.
But the head of Iran's atomic energy organisation, Ali Akbar Salehi,
appeared to return to a more conciliatory stance in comments to the
official IRNA news agency late on Wednesday.
The amount of plutonium the reactor will be able to yield will be
reduced to less than 1 kg (2.2 pounds) from 9-10 kg (20-22 pounds)
annually in its original design, he said. Western experts say 9-10
kg would be enough for 1-2 nuclear bombs and that Arak's capacity
should be scaled back.
"We are currently busy redesigning that reactor to arrange for that
alteration," Salehi was quoted by IRNA as saying.
After talks with senior U.S. officials earlier this week, Iran
questioned the feasibility of the July deadline for a permanent
accord that would minimise the risk of a wider Middle East war over
Tehran's nuclear ambitions.
While an extension is possible under the terms of the talks, experts
believe both Iran and the powers may face domestic political
pressures to toughen their terms during this extra time period,
further clouding the outlook for a breakthrough.
The next round of negotiations will be held in the Austrian capital
Vienna on June 16-20.
RUSSIA SEES GROUNDS FOR OPTIMISM
In April, Princeton University experts said that Arak's annual
plutonium production could be lowered to less than 1 kg - well below
the roughly 8 kg needed for an atomic bomb - if Iran changed the way
Arak is fuelled and lowered its power capacity.
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However, Iran expert Ali Vaez said the major powers and Israel -
Iran's arch foe - "remain concerned that Iran could suddenly revert
to the original design and build a reprocessing facility" needed to
extract plutonium from spent reactor fuel.
"That would be a lengthy but hard-to-stop process," Vaez, of the
International Crisis Group think-tank, said in a report.
Heavy-water reactors like Arak, fuelled by natural uranium, are seen
as especially suitable for yielding plutonium. To do so, however, a
spent fuel reprocessing plant would also be needed to extract it.
Iran is not known to have any such plant.
The powers want Iran to scale back its capacity to refine uranium in
order to deny it any capability to quickly produce enough of the
material for a bomb. Iran says it needs to refine uranium to fuel a
planned network of nuclear power plants.
French Foreign Minister Laurent Fabius said this week the talks were
"still hitting a wall" on the enrichment issue.
After meeting Iranian officials in Rome this week, a senior Russian
Foreign Ministry official said some aspects of a comprehensive
solution to the Iranian nuclear problem could be agreed during next
week's meeting, but more effort was needed.
"The chances for it are increasing. This adds to an optimism but
requires additional efforts," Russian news agencies Itar Tass and
Interfax quoted Deputy Foreign Minister Sergei Ryabkov, Moscow's
chief negotiator, as saying.
(Additional reporting by Vladimir Soldatkin in Moscow; Writing by
Fredrik Dahl; Editing by Mark Heinrich)
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