Iran rejected a European Union offer to arrange direct nuclear talks with the U.S., senior diplomats say, risking fresh tension between Tehran and Western capitals.

Two senior Western diplomats said Iran has ruled out attending a meeting in Europe for now, saying it wanted a guarantee first that the U.S. would lift some sanctions after the meeting.

The U.S. had said it would attend the talks, which the EU had hoped to host in the coming days. However, Washington had refused to provide sanctions relief before face-to-face negotiations with Iran had taken place.

Diplomats said Iran’s rejection didn’t kill off all hopes of direct negotiations in coming months and that Tehran’s move might be an attempt to gain leverage in future talks. Those talks could yet start before the Iranian new year in late March.

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Still, Iran’s move is likely to exacerbate tensions in the coming days.

A State Department spokesman didn’t respond to a request for comment.

At stake are efforts by the EU to revive the 2015 nuclear deal from which the Trump administration withdrew and whose limits Iran has subsequently breached. Both the Biden administration and Iran say they want to restore the accord, but the two sides have been stymied by a debate on which should move first.

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As that dispute has festered, France, the U.K. and Germany are working on a resolution they plan to present to the board of the International Atomic Energy Agency next week that would censure Iran for its recent steps to expand its nuclear activities and its failure to cooperate with the agency’s probe into its nuclear work.

Iran has warned if the censure move goes ahead it might end an agreement it struck earlier this month with the IAEA that would allow most international inspections to continue. Iran had previously said it would significantly curtail inspectors’ access to its nuclear activities, but it scaled back that move after IAEA Director General Rafael Grossi visited Tehran.

If Iran follows through on that threat, it would greatly reduce international oversight of Iran’s nuclear work, a situation that Mr. Grossi has said would gut the agency’s ability to keep Iran’s nuclear program in check.

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The Biden administration has said it wants to return to the nuclear deal but won’t suspend its sanctions on Iran until Tehran reverses the multiple steps it has taken to breach the 2015 nuclear deal.

European diplomats had warned that if Iran stayed away from the talks, which the EU hoped to arrange for this coming week, it could leave Tehran more isolated diplomatically. One senior European diplomat said that Iran was however fearful of going home empty-handed from a meeting with the U.S., which could have sparked a major backlash in Iran.

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