Iran, Big powers Close to Historic Nuclear Deal

After more than two weeks of marathon negotiations, Iran and six world powers appeared close to a historic nuclear deal that would bring sanctions relief in exchange for curbs on Tehran's atomic programme, diplomats said on Sunday.

But U.S. Secretary of State John Kerry cautioned that some difficult issues remained on the 16th day of ministerial negotiations between Iran, the United States, Britain, France, Germany, Russia and China.

"I think we're getting to some real decisions," Kerry told reporters in the Austrian capital. "So I will say, because we have a few tough things to do, I remain hopeful. Hopeful."

Several diplomats close to the talks said an agreement that would end more than a year and a half of negotiations could come as early as on Sunday. In a sign that something might be in the works, both Russian Foreign Minister Sergei Lavrov and Chinese Foreign Minister Wang Yi were expected to join the talks.

A senior Iranian official echoed Kerry's cautious optimism.

"The deal is within reach today," a senior Iranian official told Reuters. "But some issues remain that need to be resolved by foreign ministers."

Iran and the six powers involved in the talks have given themselves until Monday to reach a deal, their third extension in two weeks, as the Iranian delegation accused the West of throwing up new stumbling blocks to an accord.

Among the biggest sticking points this week has been Iran's insistence that a United Nations Security Council arms embargo and ban on its ballistic missile programme dating from 2006 be lifted immediately if an agreement is reached.

Russia, which sells weapons to Iran, has publicly supported Tehran on the issue.

However, a senior Western diplomat said earlier in the week the six powers remained united, despite Moscow's and Beijing's well-known dislike of the embargos.

KHAMENEI SETS NO NEW 'RED LINES'

Western powers have long suspected Iran of aiming to build nuclear bombs and using its civilian atomic energy programme to cloak its intention - an accusation Iran strongly denies. The goal of the deal is to increase the time it would take for Iran to produce enough enriched uranium fuel for a single weapon to at least one year from current estimates of 2-3 months.

If there is a deal, the limits on Iran's enrichment programme are expected to be in place for at least a decade.

Other problematic issues in the talks are access for inspectors to military sites in Iran, answers from Tehran over past activity and the overall speed of sanctions relief.

Kerry and Zarif have met nearly every day since Kerry arrived in Vienna more than two weeks ago for what was intended to be the final phase in a negotiation process that began with an interim nuclear deal clinched in November 2013.

An agreement would be the biggest step towards rapprochement between Iran and the West since the 1979 Islamic Revolution, although both sides are likely to remain wary of each other even if a deal is concluded.

In separate comments, Iran's President Hassan Rouhani suggested the talks could go either way while Iranian Supreme Leader Ali Khamenei said Tehran would continue its fight against "global arrogance" - referring to the United States.

According to his website, Khamenei was asked by a student what would happen to the "fight against global arrogance" after the completion of the nuclear talks and the supreme leader replied that fight must go on.

"Fighting global arrogance is the core of our revolution and we cannot put it on hold. Get ready to continue your fight against the global arrogance," Khamenei was quoted as saying. "The U.S. is the true embodiment of the global arrogance."

But Khamenei did not set any new "red lines" for his negotiators as he did in a tough speech two weeks ago.

(Additional reporting by Louis Charbonneau, John Irish and Shadia Nasralla; Writing by Louis Charbonneau; Editing by Giles Elgood)