By Louis Charbonneau and Parisa Hafezi
VIENNA (Reuters) - Iran has reduced demands for the size of its future nuclear enrichment program in talks with world powers although Western governments are urging Tehran to compromise further, Western diplomats close to the negotiations said on Thursday.
The diplomats, who spoke to Reuters at the start of a two-week round of negotiations between Iran and the United States, Britain, France, Germany, Russia and China, said that despite some movement from Tehran it would not be easy to clinch a deal by their self-imposed deadline for a deal of July 20.
Tehran's shift relates to the main sticking point in the talks - the number of uranium enrichment centrifuges Iran will maintain if a deal is reached to curb its nuclear program in exchange for a gradual end of sanctions. Ending the decade-long dispute over Iran's nuclear ambitions is seen as instrumental to defusing tension and averting a new Middle East war.
"Iran has reduced the number of centrifuges it wants but the number is still unacceptably high," a Western diplomat told Reuters on condition of anonymity and without further detail.
On Wednesday a senior Iranian official told Reuters that Tehran has refused to back down from its demand to maintain 50,000 operational centrifuges, a figure deemed by Western officials to be out of keeping with Iran's stated need for a strictly civilian nuclear energy program.
Iran, a major oil producer, says it plans a future network of nuclear power plants to diversify its energy supply, though just completing one of them would take many years, analysts say.
"Iran needs at least 50,000 centrifuges and not 49,999," the Iranian official said. "We will not compromise on that ... The other party is talking about a few thousands and this is unacceptable for Iran."
That figure has been in the public domain for some time. The head of Tehran's atomic energy organization, Ali Akbar Salehi, said months ago that the Natanz enrichment plant alone would need 50,000 advanced centrifuges going forward.
But the Western diplomats said that behind closed doors Iran was no longer insisting on 50,000 machines. It had signaled it would settle for a lower figure but declined to be specify the number so as not to disrupt the negotiations.
Iran now has over 19,000 centrifuges, though only around 10,000 of those are running. The powers want that number cut to the low thousands, to ensure Iran cannot quickly produce enough high-enriched uranium for a bomb, should it choose to do so.
Tehran denies allegations from Western powers and their allies that it is developing a nuclear-weapons capability behind the screen of a declared civilian atomic energy program.
IRAN "WILL NOT KNEEL"
Iranian officials declined to comment directly on the reported concession on centrifuges.
"As we said, we are ready to assure the world that we are not after the bombs," another senior Iranian official told Reuters. "We have shown our goodwill but will not yield to demands that violate our rights.
"A few thousand more or less centrifuges makes no difference," he added. "Our right to enrichment has been accepted by all parties involved in the talks. ... There are technical ways to assure both sides about securing their rights and removing concerns."
Western governments are exerting pressure for Iran to compromise further in the interest of nailing down a deal by July 20, a deadline that Western officials say privately will be extremely difficult to meet.
U.S. Secretary of State John Kerry chided Tehran on Tuesday by saying in a Washington Post article that Iran's "public optimism about the potential outcome of these negotiations has not been matched, to date, by the positions they have articulated behind closed doors."
On Wednesday, British Foreign Secretary William Hague echoed Kerry's criticism.
"We will not accept a deal at any price," he said in a statement. "A deal that does not provide sufficient assurances that Iran will not develop a nuclear weapon is not in the interests of the UK, the region or the international community."
Iranian Foreign Minister Mohammad Javad Zarif, in an apparent response to Kerry's remarks, said Tehran was ready to take concrete steps to ensure its nuclear program is peaceful but will not "kneel in submission" to do a deal.
Centrifuges are not the only stumbling block in the talks. One of the more sensitive matters is Iran's ballistic missile program, which is banned under U.N. Security Council sanctions imposed on Tehran between 2006 and 2010 over its refusal to suspend enrichment and other activity with bomb applications.
The United States has insisted that Iran's ballistic missile capabilities be covered under the potential nuclear deal under discussion in Vienna but Tehran does not want that to be on the table, officials close to the negotiations have said.
Deputy Foreign Minister Abbas Araqchi, who along with Zarif is leading the Iranian delegation in Vienna, confirmed this by saying that "the two sides are divided on this topic."
"Our position remains the same," Araqchi was quoted as saying on Wednesday by the Iranian student news agency ISNA. "Iran's defense system is not up for negotiation."
Other disputes include the duration of any nuclear deal, the timetable for ending the sanctions, and the fate of a research reactor that could yield significant quantities of plutonium, an alternative fuel for nuclear weapons.
The current round of talks in the Austrian capital will run until at least July 15.
(Additional reporting by Fredrik Dahl in Vienna and Mehrdad Balali in Dubai; Editing by Mark Heinrich)