By Louis Charbonneau and Fredrik Dahl
VIENNA (Reuters) - Iran will never slow down its nuclear research programme, its supreme leader said on Wednesday as negotiators from Tehran and six world powers struggled to narrow "significant gaps" that the United States warned might be insurmountable.
The stakes in a deal are high on both sides. Western powers, along with Russia and China, want to prevent chronic tensions in the Middle East from boiling over into a wider war or triggering a regional nuclear arms race. Iran, for its part, is keen to be rid of international sanctions hobbling its oil-based economy.
Clerical supreme leader Ayatollah Ali Khamenei said that the Islamic Republic's negotiating team in Vienna should not yield to issues "forced upon them".
"These negotiations should continue," he told nuclear scientists in Tehran, the official IRNA news agency reported. "But all should know that negotiations will not stop or slow down any of Iran's activities in nuclear research and development."
Tehran denies suspicions that it has used its declared civilian atomic energy programme as a front for covertly developing the means to make nuclear weapons, maintaining that it seeks only electricity from its enrichment of uranium.
Negotiators from Iran and the so-called P5-plus-one - the United States, Russia, China, Britain, France and Germany - plan after their two days of talks in Vienna to start drafting a long-term agreement on settling their decade-old nuclear dispute by a self-imposed deadline of July 20.
They will begin their next round of talks in the Austrian capital on May 13, European Union foreign policy chief Catherine Ashton, coordinating the talks for the powers, told reporters while standing next to Iranian Foreign Minister Mohammad Zarif.
"A lot of intensive work will be required to overcome the differences," she said after the April 8-9 meeting ended. "We will aim to bridge the gaps in all the key areas."
A senior U.S. administration official, speaking on condition of anonymity, told reporters: "Now we are set to start drafting. At this point we don't know if we'll be successful in bridging those gaps.".
Russia's chief negotiator, however, suggested progress had been achieved on how to resolve concerns about Iran's planned Arak research reactor. Tehran says is a facility designed to produce radio-isotopes for medical treatments; the West suspects it will be geared to yielding plutonium for atomic bombs.
"The possibility of a compromise on this issue has grown," Interfax news agency quoted Deputy Foreign Minister Sergei Ryabkov as saying. "Centimetre by centimetre, drop by drop, we are moving forward. In general there is a positive dynamic."
Zarif said more than half of the issues had been sorted out.
"We have agreement over 50 to 60 percent of the (final) draft ... but the remaining parts are very important and contain various issues," Zarif told reporters.
The U.S. official, however, had a somewhat different view: "The only thing that matters at the end of the day is to get to the agreement ... Nothing is agreed until everything is agreed."
"SENSE OF URGENCY"
Iran says that its ballistic missile programme, banned under
sanctions the U.N. Security Council imposed over its refusal to halt uranium enrichment, would not be discussed in the talks. But the U.S. official, asked if the missile programme came up, said "every single issue you can imagine" had been raised.
"The Iranians clearly have a sense of urgency to get a deal done, as does the P5+1 (the six powers)," a senior diplomat close to the talks said, but "there are still some significant gaps."
The toughest issues to be tackled are Iran's future uranium enrichment capacity, nuclear facilities that Western powers believe have little or no civilian value, future nuclear research as well as the sequencing of steps to remove the international sanctions that have crippled Iran's economy.
Despite Khamenei's pledge to the contrary, U.S. and European officials say they will insist on limits to Iran's efforts to develop more efficient enrichment technology that would enable Tehran to produce sensitive nuclear material at a faster pace.
Enriched uranium provides the fuel for civilian nuclear power stations but also, if refined to a high degree, the fissile core of a nuclear bomb.
Background tensions over Russia's involvement in Ukraine and Western threats of further sanctions against Moscow and over the U.S. denial of a visa for Iran's proposed new U.N. envoy in New York have so far not harmed the nuclear talks, diplomats say.
The U.S. official reiterated that Russia's delegation continued to play a "constructive, focused role." Asked if the dispute over Iran's U.N. ambassador nominee was having an impact on the negotiations, the official only repeated the White House statement that the nominee is "not viable".
The six powers' immediate goal in the talks is to extend as much as possible Iran's so-called breakout" period - the time it would need to develop a nuclear weapon. U.S. Secretary of State John Kerry said on Tuesday the current Western assessment of Iran's capability in this regard is two months.
Khamenei, who has the last say on Iran's affairs of state, has repeatedly said that the OPEC member's "red lines" are that it will never give up enrichment or shut any nuclear complex.
Among the global powers' most pressing concerns are Iran's centrifuge research and development programme, the size of its uranium stockpiles, the future of the Arak reactor project and of the future of the Fordow underground enrichment plant, a secret site until Western intelligence uncovered it in 2009.
Iran's priority is an end to sanctions that have drastically reduced its oil income and virtually barred it from the international financial system. Tehran also wants to regain what it regards as its rightful place as a leading regional power.
The Vienna talks are building on a preliminary deal that Iran and the powers reached in Geneva last November. That agreement provided Iran with limited sanctions relief in exchange for a six-month suspension of some nuclear activities, including higher-grade enrichment, that began on January 20.
The U.N. nuclear agency said on Wednesday that Iran was complying with the November interim deal. The U.S. official said Washington was also fulfilling its commitments regarding the limited sanctions relief promised to Tehran under that accord.
(Additional reporting by Parisa Hafezi and Justyna Pawlak in Vienna, Mehrdad Balali in Dubai and Steve Gutterman in Moscow; Editing by Mark Heinrich)