World Powers, Iran To Activate Landmark Nuclear Deal After IAEA Nod


Iran has halted its most sensitive nuclear activity under a ground-breaking deal with world powers, a confidential U.

atomic agency report reviewed by Reuters on Monday showed, paving the way for the easing of some Western sanctions.

Western states were expected to ease sanctions later on Monday after the United Nations nuclear watchdog confirmed Iran is meeting its end of the bargain under a November 24 interim accord to resolve a decade-old dispute over its nuclear program.

European Union foreign ministers, meeting in Brussels, were due to take a decision on EU measures later in the day.

The U.
State Department and European Union confirmed receiving a report from the International Atomic Energy Agency but neither commented on its content.

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 and ease the risk of new war in the Middle East.

Tehran is seeking an end to painful U.
and EU sanctions that have severely damaged the OPEC producer's 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.

"We are looking forward to confirmation from the IAEA that Iran is implementing its side of the deal," British Foreign Secretary William Hague told reporters before meeting his counterparts in Brussels.

"We will be fulfilling our side of the deal.
" The EU's foreign policy chief Catherine Ashton, who coordinates diplomatic contacts with Iran on behalf of the six powers, said she expected talks on the final settlement to start within the next few weeks.

Under the interim deal, Iran agreed 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 stockpile of this higher-grade uranium, and cease work on the Arak heavy water reactor, which could provide plutonium, an alternative to uranium for bombs.

IAEA REPORTING PROGRESS The IAEA said Tehran had begun the dilution process and that enrichment of uranium to 20 percent had been stopped at the two facilities where such work is done.

"The Agency confirms that, as of 20 January 2014, Iran .

has ceased enriching uranium above 5 percent U-235 at the two cascades at the Pilot Fuel Enrichment Plant (PFEP) and four cascades at the Fordow Fuel Enrichment Plant (FFEP) previously used for this purpose," its report to member states said.

It was referring to Iran's two enrichment plants, at Natanz and Fordow.

Cascades are linked networks of centrifuge machines that spin uranium gas to increase the concentration of U-235, the isotope used in nuclear fission chain reactions, which is found in nature at concentrations of less than 1 percent.

Iranian state TV earlier said Iran had suspended 20 percent enrichment at Natanz and inspectors were heading to Fordow.

In return, Tehran is expecting to be able to retrieve $4.

2 billion in oil revenues frozen overseas, and resume trade in petrochemicals, gold and other precious metals.

The U.
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.

The deal was reached after months of secret negotiations between Washington and Tehran, and marks a new thaw in relations between the United States and Iran, enemies since the 1979 Iranian revolution.

"The iceberg of sanctions against Iran is melting," the head of Iran's Atomic Energy Organization, Ali Akbar Salehi, told state TV.

The breakthrough is widely seen as a result in part of the election of Hassan Rouhani, a relative moderate, as Iran's president last year.

Rouhani is expected to court global business this week at the World Economic Forum in Davos, although any future trade bonanza depends on the long-term success of nuclear diplomacy.

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.

Reaching the final accord will mean overcoming decades of deep-seated mistrust between Iran and the West, and politicians on both sides have warned it will be hugely challenging.

The preliminary deal does dampen talk of war: the United States and Israel had both refused to rule out military action against Iranian nuclear sites if the matter could not be resolved by diplomacy.

DOUBTS But Israel, which is believed to have the Middle East's only nuclear arsenal and views a nuclear-armed Iran as an existential threat, has branded the deal a "historic mistake" as it does not dismantle Tehran's uranium enrichment program.

Its allies in the U.
Congress have threatened to impose new sanctions on Iran, even though President Barack Obama has urged them to give diplomacy a chance.

Mark Dubowitz, head of the Foundation for Defense of Democracies in Washington and a proponent of tough sanctions on Iran, said that by providing economic relief, the West will lose future bargaining power.

"The interim deal does nothing over the next 12 months to prevent Iran from proceeding with the nuclear-weapon and ballistic-missile research that are the keys to a deliverable nuclear weapon," he said.

"Ahead of final negotiations, Tehran will be in a stronger position to block peaceful Western efforts to dismantle its military-nuclear program.

" The U.
nuclear watchdog will play a key role in checking that Iran implements the deal, but its increased access falls short of what it says it needs to investigate suspicions that Tehran may have worked on designing an atomic bomb in the past.

"The accord gives the powers and Iran plenty of flexibility in going about reducing Iran's nuclear threat to a level the world will accept," said proliferation expert Mark Hibbs of the Carnegie Endowment think-tank.

"But it hasn't spelled out how they will work with the IAEA to resolve allegations Iran has been working on nuclear weapons.