Iran says in touch with powers on new talks, U.S. denies

The EU is preparing to intensify sanctions against Iran with an embargo on its economically vital oil exports. EU diplomats said on Wednesday member governments had also agreed in principle to freeze the assets of Iran's central bank, but had yet to agree how to protect non-oil trade from sanctions.Iran has threatened to block the Strait of Hormuz, used for a third of the world's seaborne oil trade, if it cannot sell its own crude, fanning fears of a descent into war in the Gulf that could inflame the Middle East.

Iranian politicians said U.S. President Barack Obama had expressed readiness to negotiate in a letter to Tehran, a step that might relieve tensions behind recent oil price spikes."Negotiations are going on about venue and date. We would like to have these negotiations," Iranian Foreign Minister Ali Akbar Salehi told reporters during a visit to Turkey."Most probably, I am not sure yet, the venue will be Istanbul. The day is not yet settled, but it will be soon."

Washington denied there were any new discussions underway about resuming talks, but declined to comment on whether Obama had sent a letter to Tehran."There are no current talks about talks," State Department spokeswoman Victoria Nuland said on Wednesday.

"What we are doing, as we have said, is making clear to the Iranians that if they are serious about coming back to a conversation, where they talk openly about their nuclear programme, and if they are prepared to come clean with the international community, that we are open to that," Nuland said at a media briefing.The United States is pushing countries to reduce the volume of Iranian oil they buy in line with a new sanctions law Obama signed on December 31 that targets Tehran's ability to sell crude oil.

The State Department denial was echoed by a spokesman for EU foreign policy chief Catherine Ashton, who represents the six world powers trying to engage with Iran."There are no negotiations under way on new talks," he said in Brussels. "We are still waiting for Iran to respond to the substantive proposals the High Representative (Ashton) made in her letter from October."

SERIOUS NEGOTIATIONS

British Foreign Secretary William Hague said Iran had to be ready for serious negotiations. "It is significant that when we are discussing additional sanctions in the European Union an offer of negotiations emerges from Iran," he said.

"We will not be deterred from imposing additional sanctions simply by the suggestion there may be negotiations. We want to see actual negotiations," he told a news conference in Brazil.Tehran denies wanting nuclear bombs, saying its enrichment work is for power generation and medical applications.

The last talks between Iran and the permanent members of the U.N. Security Council - the United States, Britain, France, Russia and China - along with Germany stalled in Istanbul a year ago, with the parties unable to agree even on an agenda.The six countries have also failed to agree on a common line in their relations with Iran.

Chinese Premier Wen Jiabao defended his country's extensive oil trade with Iran against Western sanctions pressure in comments published on Thursday. Even so, he said Beijing firmly opposes any efforts by Tehran to acquire nuclear weapons.Russian Foreign Minister Sergei Lavrov said a last-ditch military option mooted by the United States and Israel would ignite a disastrous, widespread Middle East war. Russia has also criticised the new sanctions.

PROTRACTED IMPASSE

EU foreign ministers are expected to approve a phased ban on imports of Iranian oil at the meeting on January 23 - three weeks after the United States passed a law that would freeze out any institution dealing with Iran's central bank, effectively making it impossible for most countries to buy Iranian oil.

"On the central bank, things have been moving in the right direction in the last hours," one EU diplomat said on Wednesday. "There is now a wide agreement on the principle. Discussions continue on the details."Iran has said it is ready to talk but has also started shifting uranium enrichment to a deep bunker where it would be less vulnerable to the air strikes Israel says it could launch if diplomacy fails to curb Tehran's nuclear drive.

Western diplomats say Tehran must show willingness to change its course in any new talks. Crucially, Tehran says other countries must respect its right to enrich uranium, the nuclear fuel which can provide material for atomic bombs if enriched to much higher levels than that suitable for power plants.Israeli Prime Minister Benjamin Netanyahu, speaking during a visit to the Netherlands on Wednesday, repeated his view that "Iran must not be allowed to develop nuclear weapons, period."

Earlier in the day, his Defence Minister Ehud Barak said any decision about an Israeli attack on Iran was "very far off.Iranian politicians said Obama had written to Supreme Leader Ayatollah Ali Khamenei responding to Tehran's threat to close the Strait of Hormuz if sanctions prevent it selling oil.

Several members of Iran's parliament who discussed the matter on Wednesday said it included the offer of talks."In this letter it was said that closing the Strait of Hormuz is our (U.S.) 'red line' and also asked for direct negotiations," the semi-official Fars news agency quoted lawmaker Ali Mottahari as saying.

Ashton wrote to Iranian negotiator Saeed Jalili in October to stress that the West still wanted to resume talks but Iran must be ready to engage "seriously in meaningful discussions" about ways to ensure its nuclear work would be wholly peaceful in nature.A U.N. nuclear watchdog report has lent weight to concern that Iran has worked on designing a nuclear weapon.