Kerry Says Iran Faces 'Tough Decisions' at Nuclear Talks

Iran has to take some "tough decisions" as world powers seek to hammer out a nuclear deal, U.S. Secretary of State John Kerry said Thursday with negotiations due to resume next week.

His comments came as he was grilled by U.S. lawmakers over the talks between Iran and the so-called P5+1 group, which are due to start up again in Vienna on Monday.

Under a six-month interim deal, Iran agreed to freeze its uranium enrichment program in return for sanctions relief worth some $6-7 billion, including the transfer of some $4.2 billion in frozen overseas funds.

Kerry insisted during a hearing of the Senate appropriations committee that Washington was testing whether the new Iranian leadership of President Hassan Rouhani was serious in reining in its nuclear program, which the West believes is a covert grab for an atomic bomb.

"We believe we're heading in the right direction. I can't tell you where it's going to finally land, we don't know," Kerry said of the negotiations due to last for the next six months towards a comprehensive deal.

"There's some very tough decisions the Iranians are going to have to make -- very tough -- in order to meet the international community's standard for certainty as to the peacefulness of this program."

But he hit back against criticism that Iran was now attracting cash-flow and business back to the country, and that the sanctions relief was being used to fund Hezbollah militants fighting in Syria.

The top U.S. diplomat said he had contacted his counterparts around the world amid reports of trade delegations going to Iran.

"We have made it crystal clear that Iran is not open for business. They have accepted that," Kerry said.

"They are not cutting deals. There are people who have traveled, but there have not been new deals."

He stressed again that the tough sanctions regime put in place against Iran, which has brought its economy to its knees, had not been dismantled.

"Nothing in the architecture of the sanctions regime has been changed whatsoever. Iran's economy contracted by 6 percent last year. It is expected to contract again this year. Inflation remains at almost 40 percent," Kerry told lawmakers.

He also tussled with Republican Senator Mark Kirk, who suggested that with the sanctions relief Iran now had some $25 billion in liquid assets which it was using to boost payments to Hizbullah.

"I would expect that we would see even more terrorism with this additional money available to the Islamic Republic of Iran," Kirk said.

But Kerry countered that Iran "has huge economic problems" and said around $15 billion to $30 billion of Iran's earnings, mainly from oil revenues, was being siphoned away and frozen in overseas accounts.

"So they're losing. They're losing enormous sums of money and more than a hundred billion dollars that is now frozen."