China urges 'flexibility' in Iran nuclear talks

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Iran's economic ally China urged all sides Tuesday in upcoming nuclear talks to show "flexibility and sincerity" even as Tehran sent mixed messages with hints of compromise and blasts of defiance.

The appeals by China -- among the world powers taking part in the negotiations later this week -- carry significant weight in Tehran and the West, and appeared aimed at nurturing the cautious hope that this dialogue won't quickly collapse like the last attempt more than a year ago.

Senior envoys from Iran and six world powers -- the five permanent U.N. Security Council members plus Germany -- are expected to hold preliminary strategy sessions Friday in Istanbul and move into direct talks the next day. The timetables appear open, but there is speculation that the sessions will not stretch beyond Saturday in a bid for a slower, step-by-step approach that will involve scheduling future rounds of talks.

"We hope all parties will cherish and seize this opportunity, show flexibility and sincerity in the dialogue, to open a constructive and sustained dialogue process," said a statement from China's Foreign Ministry.

China provides an economic lifeline to Iran as one of its major oil customers and investors in Iranian projects. China and Russia, also part of the nuclear talks, have opposed the tough sanctions implemented by the U.S. and Europe.

Some potential cards have been revealed in advance of the talks.

The U.S. and allies are rallying around efforts to quickly curb Iran's uranium enrichment, a process which produces reactor fuel but can also make weapons-grade material at higher levels. Iran strongly denies that it seeks nuclear arms.

The Western-backed demands include halting Iran's production of 20 percent enriched uranium -- higher than the 3.5 percent needed for its lone energy-producing reactor -- and shipping the stockpile out of the country. Iran says the 20 percent material is needed at a separate reactor for medical research, but Western officials and allies worry that the higher-enriched fuel could be turned into warhead cores in a matter of months.

Iran has countered with signals that it could eventually suspend its production of the 20 percent enrichment, but with concessions in return. Such concessions could include lifting some of the economic sanctions that have targeted Iran's oil exports and sharply complicated its links to international banking networks.

Iran, however, considers pressures for a full-scale halt to uranium enrichment as a potential deal breaker. Iran views its self-sufficiency in nuclear fuel as one of the milestones in its goal of becoming a technology leader for the region. Iran's enrichment labs are permitted under a U.N. treaty overseeing the spread of nuclear technology.

"Whoever wants to violate the rights of the Iranian nation will be dealt a blow to the mouth," Iranian President Mahmoud Ahmadinejad said Tuesday during a visit to the southern province of Hormozgan.

The head of the Iranian parliament's influential foreign policy committee, Alaeddin Boroujerdi, said Tehran's negotiators are open to proposals but described the overall issue of uranium enrichment as "nonnegotiable."

"It is time for a revision in sanctions since Iran has proved its goodwill," he said. "The sanctions have no relevant link with the nuclear program and they should be removed."

Although Iran's economy is facing the most aggressive international squeeze in decades, Ahmadinejad claimed the country has enough oil revenue to cushion the shocks.

"We have as much hard currency as we need and the country will manage well, even if we don't sell a single barrel of oil for two or three years," he said in his speech, which was carried live on state TV.

Iran, OPEC's second-largest producer, exports some $80 billion oil per year -- accounting for 80 percent of the country's foreign revenue and about 60 percent of its annual budget.

The 27-nation European Union, which accounts for about 18 percent of Iran's oil exports, plans to begin a boycott in July. Almost no Iranian oil enters the U.S. market.

Iran said Tuesday it cut off oil sales to Greece and Spain, the latest European nations to be hit by Iranian pre-emptive retaliation ahead of the EU oil embargo. Iran earlier cut off shipments to Britain and France -- both permanent Security Council members and part of this week's planned nuclear talks.