Iran, World Powers Set for Showdown in Moscow

World powers resume crisis talks with Iran on Monday amid hope that a crippling oil embargo and pressure from hosts Russia will finally force the Islamic Republic to scale back its nuclear drive.

The two-day meeting follows a bruising May session in Baghdad during which Iran nearly walked out of negotiations aimed ultimately at keeping it from joining the exclusive club of nations with an atomic bomb.

Host Russia however is keen to flex its diplomatic muscle and make Iran an example of how Moscow's influence over Soviet-era partners could be used to avoid foreign military intervention in the 16-month crisis in Syria.

"There are reasons to believe that the next step will be taken in Moscow," Russia's Deputy Foreign Sergei Ryabkov said Friday. "It is important for Russia to ensure that the negotiating process continues."

Failure in Moscow could leave the process in tatters and raise the threat of air raids from arch-foe Israel -- a fateful scenario in which broader conflict would lead to a spike in oil prices that could tip over the world's teetering economy.

But a July 1 deadline for a full EU oil embargo and the June 28 rollout of tough U.S. sanctions against a host of Iranian oil clients is providing added pressure for Tehran to bargain more seriously.

Two of the biggest bones of contention involve the speed with which world powers lift existing sanctions and the recognition of Iran's "right to enrich".

The latter is emerging as a key demand that Iranian negotiator Saeed Jalili is likely to present to the present to EU foreign policy chief Catherine Ashton when she represents the five permanent U.N. Security Council members and Germany in Moscow.

"We expect that Iran's right to nuclear technologies, including uranium enrichment, will be recognized and respected," Jalili told Russia's RT state-run world news channel in comments translated from Farsi.

Iran for its part "has the capacities to cooperate in disarmament and nuclear non-proliferation, so these capacities should be used by the international community," Jalili said in Friday's broadcast.

"I think that addressing these two issues will help to advance the negotiations."

Diplomats said Iran has agreed to discuss the idea of limits to its enrichment program under a proposal initially outlined in Baghdad.

"Their message on enrichment has been received," a Western diplomat close to the negotiations.

"I think that much will depend on how Iran reacts to our proposals as well. But we're ready to discuss theirs," the Western diplomat said.

The terms outline by the powers last month would see Iran stop enriching uranium to 20 percent -- seen as being just steps away from weapons-grade -- and ship out its existing stock while shuttering its forbidden Fordo bunker.

The nuclear enrichment site is buried deep in the Iranian mountains and is believed to be bunker-buster proof.

The tough terms would not lead to the quick lifting of sanctions but instead see the West extend some forms of peaceful nuclear energy cooperation and provide assistance for Iran's battered aircraft industry.

Europe would also help Iran export oil to key client Asia by easing an EU ban on tanker insurance.

Iran has previously scoffed at the idea of accepting only reactor fuel and civil aviation parts in immediate return.

But pressure is mounting on U.S. President Barack Obama from both Israel and the U.S. Congress ahead of his November re-election bid to reject any compromise.

A bipartisan letter signed by 44 Senators urged Obama on Friday to cut off negotiations unless Iran agrees to shutter the Fordo bunker and limit uranium while shipping out all material of higher grade.

"The biggest hurdle to a nuclear deal right now is the absence of political will in Washington," said former Iranian delegation adviser Kaveh Afrasiabi.

But "I am cautiously optimistic and expect even a mini breakthrough provided that the western governments display the needed flexibility," Afrasiabi told Agence France Presse.

"The Moscow talks are primed for a positive step forward."