Iran, World Powers Seek Breakthrough in Baghdad

World powers pressing Iran to scale back its nuclear program Wednesday offered a new batch of incentives that however fell short of the sanctions relief sought by Tehran, which made a counter-proposal.

A spokesman for EU foreign policy chief Catherine Ashton, the lead negotiator for the P5+1 -- the United States, Russia, China, Britain, France and Germany -- said its proposals made at the meeting in Baghdad were "of interest to Iran."

The meeting, which follows a preliminary first gathering in 15 months in Istanbul in mid-April, was meanwhile expected to go into a second, unscheduled day on Thursday, an official with the Iranian delegation said.

"There are things we can do for Iran. We hope the Iranians will come back with a positive reaction to our proposals to deal with the concerns of the international community," Ashton's spokesman said.

He gave no details but media reports said they included a revival of previous attempts at a deal whereby Iran would ship abroad its stockpiles of enriched uranium in return for fuel for a reactor producing medical isotopes.

Other incentives were reportedly easing Iranian access to aircraft parts and a possible suspension of an EU insurance ban on ships carrying Iranian oil.

But beyond a pledge not to impose any more, the package made no mention of easing the barrage of sanctions that have been piled -- with more to come in July -- on Iran over suspicions the country wants nuclear weapons.

In return for the sweeteners the P5+1 want Iran to suspend 20-percent enrichment, which they see as the most worrying part of Tehran's activities since the capability reduces the theoretical "breakout" time needed to get the bomb.

Iran however is loath to give ground on what it proudly sees as its right to a peaceful nuclear program without the prospect that the international community will cut its economy some slack.

Iran made a counter-proposal in the Baghdad talks -- which were due to resume at 1500 GMT -- of "five items based on the principles of step-by-step and reciprocity," the official with Tehran's delegation said.

"And we are waiting for the reaction of the P5+1 during meetings this afternoon," the official said, speaking on condition of anonymity and without giving more details on what the offer consisted of.

"We said to the other side that we need a comprehensive approach. We need the steps that both sides have to take to be clearly defined and there is no possibility of going back on them," the source said.

"For example, that they lift sanctions that they cannot then readopt two months later under a different pretext."

Iran's chief negotiator Saeed Jalili was due to hold bilateral meetings with Ashton and with China's representative Ma Zhaoxu but not with Washington's envoy Wendy Shermann, before the next session, the official added.

U.S. President Barack Obama took office in January 2009 offering a radical change in approach to his predecessor, George W. Bush, in dealings with Iran, famously offering an "extended hand" to Tehran if it "unclenched its fist."

This failed, however, and Iran has since dramatically expanded its program, including by starting in 2010 to enrich uranium to 20 percent and from January in the Fordo site deep inside a mountain near the holy city of Qom.

Israel, Washington's closest ally in the region, feels its very existence would be under threat if its arch foe gets the bomb and has refused to rule out a pre-emptive strike on Iran's nuclear facilities.

Iranian President Mahmoud Ahmadinejad insisted on Wednesday that the "production and use of weapons of mass destruction is haram (forbidden) and have no place in the Islamic Republic of Iran's defense doctrine."

One key way for Iran to win the confidence of the P5+1 was implementing the additional protocol of the nuclear Non-Proliferation Treaty, which allows for more intrusive inspections by the International Atomic Energy Agency.

The IAEA also wants Iran to address allegations made in its November report that until 2003, and possibly since, Tehran had a "structured program" of "activities relevant to the development of a nuclear explosive device."

IAEA chief Yukiya Amano said on Tuesday after talks in Tehran that a deal on ways to go over these accusations with the Iranians would be signed "quite soon." Western reaction though was circumspect.

Ashton's spokesman meanwhile played down expectations of a dramatic breakthrough, saying that the Baghdad talks were part of what will need to be a lengthy process.

"This is the second meeting. Istanbul kicked off the process of discussions. Now we're getting on to the real substance of the matter," Michael Mann said. "We are keen to get a move on but these things can't be solved overnight."