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			 With time running short if a risky extension of the nuclear talks 
			is to be avoided, negotiators face huge challenges to bridge gaps in 
			positions over the future scope of Iran's nuclear program in less 
			than five weeks. 
 The talks, coordinated by European Union foreign policy chief 
			Catherine Ashton, stumbled during the last round in mid-May. Both 
			sides accused the other of lacking realism in their demands and 
			French Foreign Minister Laurent Fabius said the negotiations had 
			"hit a wall".
 
 Although such rhetoric may in part be a negotiating tactic, it also 
			underlines how far the sides are from resolving a dispute that could 
			unleash war in the region. Israel sees a nuclear-armed Iran as an 
			existential threat and has in the past suggested it could carry out 
			air strikes on its installations.
 
 The powers want Iran to significantly scale back its uranium 
			enrichment program, denying it any capability to move quickly to 
			production of a nuclear bomb. Iran denies any such ambition and 
			demands that crippling economic sanctions, eased slightly in recent 
			months, be lifted entirely as part of any settlement.
 
			 The sides also must resolve other complex issues, including the 
			extent of U.N. nuclear watchdog monitoring of Iranian nuclear sites, 
			how long any agreement should run and the future of Iran's planned 
			Arak research reactor, a potential source of plutonium for atomic 
			bombs.
 "We don't have illusions about how hard it will be to close those 
			gaps, though we do see ways to do so," a senior U.S. official said 
			on Monday, signaling the pace of diplomacy would intensify in the 
			days and weeks ahead.
 
 However, sounding a cautiously hopeful note after a bilateral 
			U.S.-Iranian meeting in Geneva last week, the official said that "we 
			are engaged in a way that makes it possible to see how we could 
			reach an agreement". He did not elaborate.
 
 In Tehran, Foreign Minister Mohammad Javad Zarif said: "If the other 
			parties enter in negotiations with realistic views, the possibility 
			of a final agreement exists. But if they act irrationally, we will 
			act in accordance to our national rights."
 
 Zarif, Ashton and the U.S. delegation, led by Under Secretary of 
			State Wendy Sherman and including Deputy U.S. Secretary of State 
			Bill Burns, held trilateral talks on Monday ahead of the start of 
			formal negotiations on Tuesday.
 
 U.S. and Iranian diplomats also spoke about the rapidly 
			deteriorating security situation in Iraq on Monday. A State 
			Department official said any such talks would not touch on any 
			military coordination between the long-time adversaries.
 
 Both Washington and Tehran are alarmed by the rapid advance in Iraq 
			of insurgents from the radical Islamic State of Iraq and the Levant 
			(ISIL), which is seeking to revive a mediaeval-style Islamic 
			caliphate across much of Iraq and neighbouring Syria.
 
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			BRITAIN TO REOPEN TEHRAN EMBASSY
 In a sign of warming relations between Iran and the West, Britain 
			announced plans on Tuesday to reopen its embassy in Iran with an 
			initially small presence 2 1/2 years after a mob ransacked its 
			Tehran legation. (Full Story)
 
 Britain is one the of six powers negotiating with Iran, alongside 
			France, Germany, China, Russia and the United States.
 
 Diplomatic sources have told Reuters that it is increasingly likely 
			Iran will seek an extension of the talks deadline. (Full Story) But 
			Western officials insisted the focus remained on sealing the deal by 
			late next month, noting that any extension must be agreed by all 
			sides and would likely be short.
 
 "If there is an extension if will be for a few weeks," a diplomat 
			from one of the six powers told Reuters. If a deal were really 
			within reach the sides should not need six more months.
 
 The seven states agreed on the July deadline to reach a 
			comprehensive agreement as part of an interim deal on the decade-old 
			nuclear stalemate in Geneva struck on Nov. 24.
 
 That accord - under which Iran suspended some sensitive nuclear 
			activities in exchange for limited sanctions relief - allowed for a 
			six-month extension if necessary for a settlement.
 
 It would allow up to half a year more for partial sanctions waivers 
			and restraints on Iranian nuclear activity as agreed in Geneva. To 
			avoid open conflict with a hawkish Congress, U.S. President Barack 
			Obama would want lawmakers' approval to extend.
 
			
			 
			An extension would have its perils. Analysts say both sides might 
			come under pressure from hardliners at home to toughen the terms 
			during this extra time period, further complicating the chances of a 
			successful outcome.
 This week's talks are expected to last until Friday and resume some 
			time next month ahead of the July 20 deadline.
 
 (Reporting by Justyna Pawlak; Editing by Mark Heinrich)
 
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