Powers aim to seal Iran package after US offer

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VIENNA (Reuters) - World powers meet on Thursday to finalize incentives for Iran to halt nuclear activity that could help make bombs, an overture given new political muscle by a U.S. offer to talk to Tehran, Western leaders said.

Washington said it would join multilateral dialogue with Iran if it stopped enriching uranium -- policy switch that a senior U.S. official said had won over Russia and China to pursuing sanctions against Tehran if it spurned the sweeteners.

He said that "if they (Iran) do not do so, there is also agreement that therefore we would have to proceed through the (U.N.) Security Council with a resolution and over time, depending on the Iranian response, move toward sanctions.

"What they've agreed is, if Iran does not accept this offer of negotiations, or accepts and then does not negotiate in good faith, we will return to the Security Council, we will get a resolution," the official told reporters in Washington.

Early on Thursday, Iran's official news agency IRNA brushed off Rice's gesture as "a propaganda move" but it cited no source and it was not clear if this was Iran's formal response.

Tehran says its nuclear fuel work is a non-negotiable civilian program to generate electricity, not a covert quest for bombs as the West suspects.

But Secretary of State Condoleezza Rice, announcing the U.S. shift on Wednesday, said: "It's time to know whether Iran is serious about negotiation or not."

She said the move beefed up a "carrots and sticks" package for Iran whose essentials had been agreed with Britain, France and Germany ahead of Thursday's gathering in Vienna and would be discussed further to pin down a consensus with Russia and China.

Foreign ministers from the five veto-holding, permanent powers on the Security Council along with Germany and EU foreign policy chief Javier Solana will aim to wrap up weeks of difficult negotiations on a viable strategy toward Iran.

U.S. officials said Russia and China had come around to broad support for the "carrots and sticks" package drafted by the "EU3" -- France, Germany and Britain -- but details on how to balance the offer remained to be ironed out on Thursday.

Diplomats said the incentives were expected to encompass a light-water nuclear reactor and an assured foreign supply of atomic fuel so Iran would not need to enrich uranium itself.

Sanctions could entail visa bans and a freeze on assets of senior Iranian officials before resorting to trade measures.

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Rice reiterated that a last-resort military option, should talks or sanctions prove futile, remained on the table.

But Washington, angling for firm Russian support, had accepted language in a proposed Council resolution to underpin the offer that would rule out an immediate threat of military strikes on Tehran, U.S. and European officials said.

Western leaders had wanted the resolution to designate Iran a "threat to international peace and security," a legal pathway to use of force applied in 2003 to topple Iraq's Saddam Hussein.

But Russia and China see no such danger and oppose any automatic penalty trigger until diplomatic opportunities have been exhausted. Nuclear analysts say Iran is three to 10 years away from purifying enough uranium to fuel a nuclear weapon.

The Russian and Chinese ambassadors to the United Nations welcomed the U.S. talks offer. But Beijing's envoy urged the United States not to load the proposal with preconditions.

France, Britain and Germany, which have led talks with Iran, said Tehran would face more credible pressure to compromise.

"We can only hope that those in charge in Tehran understand the scope of this announcement and will react accordingly," said German Foreign Minister Frank-Walter Steinmeier.

A think tank close to Britain's government said the U.S. decision could invigorate diplomacy by addressing security fears many experts say have spurred Tehran's bid for nuclear prowess.

"Iran has legitimate security concerns in an unstable region ... With U.S. troops next door in Iraq and Afghanistan, we have to persuade Iran that nuclear weapons are not essential to its safety," the Foreign Policy Center said in a statement.

Iranian stonewalling of U.N. atomic watchdog probes and its calls for Israel's destruction have deepened international mistrust of its nuclear intentions. But no hard evidence of underground bombmaking has been unearthed.

(Additional reporting by Washington, Paris, Tehran and London bureaux)

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