By Justyna Pawlak and Parisa Hafezi
VIENNA (Reuters) - The United States said on Tuesday Iran has the ability to produce fissile material for a nuclear bomb in two months, if it so decided, as Tehran and six world powers swung into a new round of talks in Vienna on resolving their atomic dispute.
Secretary of State John Kerry's comments in Washington highlighted Western concerns about Iran's nuclear intentions and the wide divisions between the two sides that could still foil a deal. Iran says its nuclear program is entirely peaceful.
The overarching goal of the powers - Britain, France, China, Russia, Germany and the United States - in the talks is to persuade Iran to scale back its program to the point that it would take it much longer, perhaps as long as a year, to produce fuel for a bomb if it chose to do so.
"I think it's public knowledge today that we're operating with a time period for a so-called 'breakout' of about two months. That's been in the public domain," Kerry testified at a Senate hearing.
Iran's "breakout" time is defined as how long it would take it to produce fissile material for one nuclear weapon, if it decided to build such weapons of mass destruction.
To lengthen this potential timeline, the powers want Iran to cut back the number of centrifuges it operates to refine uranium and the overall amount of enriched uranium it produces, as well as to limit its research into new technologies and to submit to invasive inspections by the U.N. nuclear watchdog.
The Islamic Republic says its nuclear fuel-making activity is only for peaceful purposes such as electricity generation, and it wants crippling economic sanctions imposed by the West and the United Nations lifted as part of any final accord.
Iran's senior negotiator, Deputy Foreign Minister Abbas Araqchi, said "general discussions" had been completed.
"The (heavy-water nuclear) reactor of Arak will remain as the heavy-water reactor ... but there are technical ways to decrease concerns over its activities ... Also Iran will not stop or suspend its uranium enrichment work under any circumstances," Araqchi said.
"But the level of enrichment can be discussed."
Refined uranium can be used to fuel nuclear power plants, Iran's stated purpose, but can also provide material for a bomb, which the West suspects may be Tehran's ultimate aim. The Arak reactor, once operational, can yield plutonium - another weapons-usable fissile material. But Iran says it intends to use the reactor only for medical and agricultural research purposes.
The meeting on Tuesday and Wednesday is the third between the powers and Iran since February and part of a series which they hope will culminate in a broad settlement of the decade-old nuclear dispute that threatens to sink the Middle East into a new war.
The meetings so far have been used by the sides largely as an opportunity to spell out their positions on issues such as the scope of Iran's uranium enrichment efforts and its contested nuclear facilities, rather than to narrow their differences.
GETTING INTO THE DETAILS
Both sides say they want to start drafting a comprehensive agreement in May, some two months before a July 20 deadline for finalizing the accord.
"What matters most to us is that there is a good agreement. Clearly we want to make progress as fast as possible but the most important thing is the quality of the agreement," the spokesman for European Union foreign policy chief Catherine Ashton, who coordinates the discussions on behalf of the powers, told reporters.
"It has to be a good agreement that everyone is happy with. So we will work as hard as we can to achieve that," said Ashton's spokesman, Michael Mann.
Iranian and U.S. negotiators are wary that any deal will face criticism from conservative hardliners at home wedded to confrontation since Iran's 1979 Islamic Revolution.
It was unclear whether the talks would be affected by a spat between Washington and Tehran over Iran's choice for a new U.N. ambassador, who has links to the 1979-81 hostage crisis, when radical Iranian students held U.S. Embassy staff for 444 days.
White House spokesman Jay Carney said on Tuesday U.S. officials had told Tehran that the choice of Hamid Abutalebi was "not viable", but stopped short of saying the diplomat would be barred from entering the United States.
Araqchi said the next round of talks will be held in Vienna "sometime between May 10 to May 20".
"We don't want to sacrifice quality of the talks for its quantity. In the final deal, Iran's nuclear rights should be respected and our demand for lifting all sanctions should be respected," Araqchi said.
The six nations have agreed internally to have a draft text of an accord by the end of May or early June, one diplomat from the powers said. But he added: "We're still in an exploratory phase ... In the end, things will happen in July."
The diplomat said issues to be discussed included how U.N. nuclear inspectors would verify whether Iran was meeting its end of any deal, suspected past atomic bomb research by Tehran, and how to deal with U.N. Security Council resolutions on Iran adopted since 2006.
The goal of the negotiations begun almost two months ago is to hammer out a long-term deal to define the permissible scope of Iran's nuclear program in return for an end to sanctions that have hobbled the OPEC country's economy.
In November, the two sides agreed an interim accord curbing some Iranian enrichment activities in exchange for some easing of sanctions. This six-month deal, which took effect on January 20, was designed to buy time for talks on a final accord.
The talks can be extended by another half-year if both sides agree to do so and negotiate the content of an extension deal.
Israel has threatened to attack its long-time foe Iran if diplomatic efforts fail. Iran says it is Israel's assumed atomic arsenal that threatens peace and stability in the Middle East.
(Additional reporting by Fredrik Dahl and Louis Charbonneau in Vienna, and; Patricia Zangerle and Roberta Rampton in Washington; Editing by Mark Heinrich and Mohammad Zargham)