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Senior U.S., Iran, EU officials to meet on Monday-Tuesday in Geneva

By Parisa Hafezi and Michelle Moghtader

ANKARA/DUBAI (Reuters) - Iranian, U.S. and European Union officials will start two days of talks about Tehran's nuclear programme on Monday, Iran said, giving its first word about what appears to be a bid to rescue faltering wider negotiations on ending a decade-old dispute.

Iranian Deputy Foreign Minister Abbas Araqchi told state-run Iranian television in remarks broadcast on Sunday that the meeting in Geneva would also discuss sanctions that have damaged the OPEC member's oil-dependent economy.

"The meeting tomorrow with the Americans will be trilateral and Helga Schmidt, the deputy of EU foreign policy chief Catherine Ashton, will be present as well," Araqchi said.

Nuclear talks between Iran and six major powers in Vienna last month ran into difficulties, with each side accusing the other of having unrealistic demands in negotiations aimed at curbing Tehran's atomic program in exchange for an end to economic sanctions that have crippled its economy.

That raised doubts over the prospects for a breakthrough by a July 20 deadline.

Western officials say Iran wants to maintain an excessive uranium enrichment capability. Iran says it wants to avoid reliance on foreign suppliers of fuel for its nuclear reactors and rejects Western allegations it seeks the capability to make atomic weapons under cover of a civilian energy programme.

The United States said on Saturday it would send its No. 2 diplomat, Deputy Secretary of State Bill Burns, to Geneva to meet senior Iranian officials on Monday and Tuesday.

Burns, who led secret U.S.-Iranian negotiations that helped bring about a Nov. 24 interim nuclear agreement between Iran and the major powers, would head a U.S. delegation, it said.

Under Secretary of State Wendy Sherman, the primary U.S. negotiator with Iran, will accompany him on a team that will include senior White House national security staff.

TIPPING POINT

The U.S. decision to travel to Geneva and meet with the Iranian delegation appeared to reflect Washington’s desire to try to break the deadlock.

"In order to really seriously test whether we can reach a diplomatic solution with Iran on its nuclear program, we believe we need to engage in very active and very aggressive diplomacy," the senior U.S. official told Reuters.

"We're at a critical moment," the U.S. official added. "We’ve always said that we would engage bilaterally with the Iranians if it can help advance our efforts, in active coordination with the P5+1."

The United States is set to join the other members of the six-power negotiating group known as the P5+1 – Britain, China, France, Germany and Russia – plus Iran for a full round of negotiations June 16-20 in Vienna. The talks are coordinated by European Union foreign policy chief Catherine Ashton.

A French diplomatic source said next week's U.S.-Iran talks were being carried out in concert with the rest of the major powers, which the U.S. official confirmed.

‎"There are specific American aspects regarding lifting of sanctions in case of an agreement that they need to go through with the Iranians," the French diplomatic source said.

Ashton's spokesman Michael Mann said EU Political Director Helga Schmid would join the U.S.-Iranian talks, adding that the U.S. delegation would be meeting Araqchi.

In a sign that Iran had been complying with its obligations under the interim nuclear agreement signed with world powers, Iran's central bank governor said on Sunday that a sixth tranche of unblocked funds worth $550 million was being delivered.

The money is part of $4.2 billion in blocked oil funds that were to be made available to Iran under the deal signed in November. Iran received limited sanctions relief in exchange for agreeing to curb its nuclear activities.

"The sixth tranche of unblocked funds is in the process of being deposited," Valiollah Seif said, according to official state news agency IRNA.

Tehran was due to receive the sixth installment by May 14 and critics have said Iran has had difficulty receiving the unblocked funds. The seventh installment, also of $550 million is due on June 17.

JULY 20 DEADLINE LOOMS

Robert Einhorn, a former top U.S. non-proliferation official, said he viewed the Burns trip as an effort to meet what appears to be an extremely challenging deadline of July 20 to secure a comprehensive agreement on Iran's nuclear program.

"There were growing concerns, I think, on all sides that the July 20 target date was becoming increasingly difficult to meet," said Einhorn, now at the Brookings Institution think-tank in Washington.

"Because the engagement at Bill Burns’ level proved instrumental in reaching the interim agreement in November, I think both sides thought it would be useful to try that channel again," he added.

Any workable overall deal will likely have to be based on a bilateral agreement between Washington and Tehran. The United States cut off ties with Iran during a hostage crisis shortly after the 1979 Islamic Revolution.

High-level bilateral meetings between the United States and Iran, virtually unthinkable in years past, have become almost routine on the sidelines of the nuclear talks with Tehran, which began in Geneva last October and moved to Vienna in February.

In announcing the Burns trip, the State Department stressed the talks were taking place "in the context of the P5+1 nuclear negotiations led by EU High Representative Cathy Ashton."

This appeared to be an effort to quiet any discontent on the part of other members of the group, some of whom were displeased last year that they were not fully informed of the details of the secret U.S.-Iran talks led by Burns.

The senior U.S. official, who spoke on condition of anonymity, said the talks would be an exchange views ahead of the Vienna negotiating round, which would require Iranians negotiators to give ground.

"We haven't yet seen the kind of realism on the Iranian side that we need to see or seen them make some of the tough choices we’re going to have to see," the official said.

(Additional reporting by Mehrdad Balali, Writing by William Maclean,; editing by Jon Boyle and Raissa Kasolowsky)

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