An Iranian diplomat, speaking on the condition of anonymity, told IRNA that talks centered around Iran's demand to exclude 20 centrifuges from the country's promised freeze of enrichment activities and change a paragraph in a European draft resolution.

The latest round of negotiations were the seventh since a political horse-trading began Saturday following Tehran's demand that 20 centrifuges be exempted from enrichment freeze for research and development work.

So far, the Europeans, represented by Germany, France and Britain, have conceded to five Iranian proposals to modify the draft resolution, but Tehran still holds reservations over two clauses, which it says are vague even after having been changed.

Iran had raised objections to the wording of the draft resolution on the way the suspension and monitoring were described.

Iran says a clause in the draft calling on the country to give 'unrestricted access' to the IAEA is illegal and has to be explicitly limited to nuclear sites declared under the IAEA's Additional Protocol permitting short-notice inspections.

Another bone of contention is a clause which says it is 'essential' that Iran keeps all parts of its enrichment program suspended, something which Tehran interprets as seeking to oblige the country to unlimited suspension.

Iranian officials have stressed that the suspension would remain in place only long enough to provide assurances that Tehran was not engaged in non-civilian activities.

Uranium enrichment is allowed under the nuclear Non-Proliferation Treaty (NPT), to which Iran is a signatory, and the country wants it as part of its efforts to master a nuclear fuel cycle.

But as a confidence-building measure, Iran agreed in its meeting with the three EU states in Paris recently to voluntarily suspend all activities related to uranium enrichment.

Earlier in the day, Foreign Ministry spokesman Hamid Reza Asefi said that 'many of the clauses in the European draft resolution have been modified according to Iran's will, but its first paragraph does not meet our views yet and still have points that must be removed'.

On Saturday, Foreign Minister Kamal Kharrazi said Tehran still finds positions which are contrary to the November 7 Paris agreement between Iran and the European trio of Germany, Britain and France and thus 'are not acceptable to us'.

"The draft resolution does not help with confidence building and the Europeans had better chose a track which would create better confidence," he said.

Earlier this week, Iran said it would start suspending uranium enrichment as of Monday, making good on its word which it gave at a recent agreement with the Europeans.

The International Atomic Energy Agency (IAEA) Board of Governors is expected to review Iran's case on Monday to decide the nature of Iran's nuclear program, which the country insists is aimed at power generation.

The United States is trying to convince the world of its allegations that Tehran's nuclear program is a front to build atomic weapons, and pave the way for referral of Iran to the UN Security Council for possible sanctions.

But, the EU trio of Germany, France and Britain pursue a different line, having offered Iran a package of economic incentives in return for suspending uranium enrichment.

The European trio have reached a 'preliminary' deal with Iran, under which Tehran would halt an enrichment program in exchange for political and economic incentives.

The EU incentives reportedly include a guaranteed supply of reactor fuel, assistance to construction of a light-water power reactor and a resumption of stalled trade talks.

But, Western diplomats Sunday sounded tough, saying they would not bow to Iran's demand over the 20 disputed centrifuges.

They said British Secretary of State Jack Straw was holding last-ditch negotiations with Iran's pointman on nuclear issues, Hassan Rowhani, to iron out the standoff.

A Western diplomat told IRNA that a tough resolution would be in place at the IAEA Board of Governors meeting if Iran refrained from giving up on the issue of the 20 centrifuges.

News emerged that Iran had formally withdrawn its demand to exempt research and development on uranium enrichment technology from a freeze of its enrichment program.

Reports said the IAEA had received a letter from Iran regarding the 20 centrifuges, which seemed to cover all the elements acceptable to the Europeans.

IRNA cannot vouch the authenticity of the news.

Earlier in the day, Asefi had sounded upbeat over the prospects of a breakthrough in the negotiations, while stressing that Tehran would continue its research and development with the uranium enrichment.

"The issue of research and development is distinct from the issue of suspension. We used to keep research and development in our agenda in the past and will continue to do so," he told reporters in Tehran at his weekly news briefing.

"We are currently engaged in negotiations with the Europeans to clarify modalities for the use of the 20 centrifuges for research and development and God willing, we will reach a desirable conclusion," he added.

... Payvand News - 11/28/04 ... --