Iran says it is in touch with powers on new talks, EU denies (Reuters)

TEHRAN (Reuters) ? Iran said on Wednesday it was in touch with big powers to hold fresh talks soon but the European Union denied it, with Britain saying Tehran had yet to show willingness for negotiations on its disputed nuclear work without preconditions.

A year after the last talks collapsed, tensions are rising with the United States and EU preparing to embargo Iran's lifeblood oil industry over its refusal to suspend a nuclear program that the West suspects is meant to develop atom bombs.

Iranian politicians said U.S. President Barack Obama had expressed readiness to negotiate in a letter to Tehran, a step that might relieve tensions behind several oil price spikes and growing fears of military conflict in the Gulf.

"Negotiations are going on about venue and date. We would like to have these negotiations," Iranian Foreign Minister Ali Akbar Salehi told reporters during a visit to Turkey.

"Most probably, I am not sure yet, the venue will be Istanbul. The day is not yet settled, but it will be soon."

A spokesman for EU foreign policy chief Catherine Ashton, representing the six powers, denied there were any fresh discussions with the Islamic Republic to organize a meeting.

"There are no negotiations under way on new talks," he said in Brussels. "We are still waiting for Iran to respond to the substantive proposals the High Representative (Ashton) made in her letter from October."

Britain was also dismissive. "There are no dates or concrete plans because Iran has yet to demonstrate clearly that it is willing to respond to Baroness Ashton's letter and negotiate without preconditions," a Foreign Office spokesman said.

"Until it does so, the international community will only increase pressure on it through further peaceful and legitimate sanctions," he said.

PROTRACTED IMPASSE

The last talks between Iran and the permanent members of the U.N. Security Council -- the United States, Britain, France, Russia and China -- along with Germany stalled in Istanbul a year ago, with the parties unable to agree even on an agenda.

Since then, a U.N. nuclear watchdog report has hardened suspicions Iran has worked on designing a nuclear weapon and Washington and the European Union have turned to much harsher economic sanctions aimed at pushing Tehran into suspending sensitive nuclear activity and entering genuine negotiations.

EU foreign ministers are expected to approve an embargo on Iranian oil at a meeting on January 23, diplomats say.

"Ahead of (that meeting) Iran is chasing headlines and pretending that it is ready to engage," a Western diplomat said in reference to Salehi's remarks.

"If it really is ready to sit down without preconditions the (six powers) would do so. Sadly, at the moment, it seems more interested in propaganda."

Iran has said it is ready to talk but has also started shifting uranium enrichment to a deep bunker where it would be less vulnerable to the air strikes Israel says it could launch if diplomacy fails to halt the nuclear program.

Western diplomats say Tehran must show willingness to change its course in any new talks. Crucially, Tehran says other countries must respect its right to enrich uranium, the nuclear fuel which, if enriched to much higher levels than that suitable for power plants, can provide material for atomic bombs.

Iran denies it is seeking nuclear weapons and says its activities are for power generation and medical applications.

Russia, a member of the six power group that has criticized the new EU and U.S. sanctions, said the last-ditch military option mooted by the United States and Israel would ignite a disastrous, widespread Middle East war.

"On the chances of whether this catastrophe will happen or not you should ask those who repeatedly talk about this," Foreign Minister Sergei Lavrov told a news conference in Moscow.

"I have no doubt that it would pour fuel on a fire which is already smoldering, the hidden smoldering fire of Sunni-Shi'ite (Muslim) confrontation, and beyond that (it would cause) a chain reaction. I don't know where it would stop."

Israeli Defence Minister Ehud Barak said on Wednesday any decision about an Israeli attack on Iran was "very far off." [ID:nL6E8CI0NH]

THREATS, FRIENDSHIP

China, which shares Russia's dislike of the new Western moves to stop Iran exporting oil, said U.S. sanctions that Obama signed into law on December 31 had no basis in international law.

"As for some countries imposing unilateral sanctions on Iran, that is not international law and other countries are under no obligation to participate," Li Song, a deputy director-general of the Foreign Ministry's Department of Arms Control and Disarmament, told an online question-and-answer session.

In reply to Tehran's threat to close the Gulf's vital oil shipping lane, the Strait of Hormuz, if sanctions prevent it selling oil, Obama has written to the senior cleric who sits atop the Islamic Republic's power structure, Iranian politicians said.

While Washington has yet to comment on the reported letter to Supreme Leader Ayatollah Ali Khamenei, several members of Iran's parliament who discussed the matter on Wednesday said it included the offer of talks.

"In this letter it was said that closing the Strait of Hormuz is our (U.S.) 'red line' and also asked for direct negotiations," the semi-official Fars news agency quoted lawmaker Ali Mottahari as saying.

"The first part of letter has a threatening stance and the second part has a stance of negotiation and friendship."

Washington has often said it has a dual-track approach to Iran, leaving open the offer of talks while seeking ever tighter sanctions as long as Tehran does not rein in its nuclear work.

But any fresh opening to Tehran might be a risky strategy for Obama in an election year as Republican presidential candidates compete over who is toughest on a country Washington has long considered a pariah state.

Ray Takeyh, senior fellow for Middle Eastern studies at the Council on Foreign Relations, said in a recent column in the Washington Post that there were doubts about Tehran's sincerity in wishing to return to talks.

"By threatening the disruption of global oil supplies, yet dangling the prospect of entering talks, Iran can press actors such as Russia and China to be more accommodating in an effort to avoid a crisis that they fear," Takeyh wrote.

"Any concessions that Iran may make at the negotiating table are bound to be symbolic and reversible."

(Reporting by Tulay Karadeniz in Ankara, Chris Buckley in Beijing, Alexei Anishchuk in Moscow, Justyna Pawlak in Brussels, Allyn Fisher-Ilan in Jerusalem, Fredrik Dahl in Vienna and Estelle Shirbon in London; Writing by Robin Pomeroy; Editing by Mark Heinrich)

Source: http://us.rd.yahoo.com/dailynews/rss/iran/*http%3A//news.yahoo.com/s/nm/20120118/wl_nm/us_iran

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