By Sune Engel Rasmussen and Laurence Norman 

Iran limited international monitoring of its nuclear activities on Tuesday, even as it said it was open to a European proposal that would bring its officials together with American negotiators for the first time since the U.S. withdrew from the nuclear deal in 2018.

Citing the U.S. refusal to lift sanctions imposed by the Trump administration, Iran said it would no longer grant United Nations inspectors daily access to its nuclear facilities, or provide round-the-clock security footage of its activities at these sites. Iran will also bar the U.N. atomic agency from inspecting other sites where it suspects nuclear-related work might be taking place.

The moves to curb international scrutiny of its nuclear facilities marks Tehran's latest effort to pressure the U.S. to lift sanctions. In recent months, Iran has also restarted enrichment of uranium at 20% purity, its highest level since 2013 and a relatively short step from producing weapons-grade material. Iran has also produced uranium metal, which can be used in the core of a nuclear weapon. The nuclear deal, known as the JCPOA, banned both actions.

From its inception, the nuclear deal was controversial in the Middle East, where longtime American allies in Israel and the Gulf opposed the U.S.'s decision to lift sanctions on Iran and recognize its right to enrich uranium for civilian purposes, albeit under tight restrictions. A return to the deal requires a complex, diplomatic choreography, as both Washington and Tehran insist the other side has to make concessions first.

On Tuesday, Israeli Prime Minister Benjamin Netanyahu warned Iran that "with or without agreements -- we will do everything so that you will not arm yourselves with nuclear weapons."

The Trump administration left the nuclear deal in May 2018 partly because it didn't restrict Iran's military footprint in the Middle East. Iran rebuffed former President Trump's attempts to negotiate a broader agreement.

Now, Tehran has said it is weighing whether to accept a proposal by senior EU officials last week to host informal talks between the remaining participants in the 2015 nuclear deal and the U.S. as a guest. In recent days, European officials have warned Iran that it risks isolation if it misses the opportunity for direct talks.

"These diplomatic contacts have to be discreet but I am reasonably optimistic" that Iran will join talks, the EU's chief diplomat, Josep Borrell, said Monday.

Iranian government spokesman Ali Rabiei said Tuesday that Iran was "looking into the European side's proposal of an informal meeting for a dialogue."

President Biden has said he intends to rejoin the nuclear deal if Iran comes back into compliance. Mr. Biden wants to use the deal as a starting point for talks about longer nuclear restrictions, constraining Iran's missile program and reeling in its regional network of militias.

Iran has refused to include those core elements of its national defense in any nuclear talks.

Hamid Aboutalebi, a former presidential adviser and Iranian ambassador, said Mr. Biden's position suggests the new U.S. administration might not be sincere about adhering to the nuclear deal, but is actually aiming for the same kind of broader security agreement that Mr. Trump sought.

"The issue is whether the U.S. will ever return and commit to the JCPOA, " Mr. Aboutalebi said.

In a separate move that could help smooth the resumption of talks, South Korea, a U.S. ally, said Tuesday it was consulting with Washington to release Iranian cash it has withheld since 2019 due to sanctions. A breakthrough would provide a much-needed infusion of foreign exchange to the Iranian sanctions-battered economy.

Iran has tens of billions of dollars worth of oil revenues stuck in overseas bank accounts because U.S. sanctions of Iran's central bank and oil exports prevented transfers of funds to Tehran. Under the 2015 nuclear deal, around $130 billion in funds, frozen under previous American sanctions, were repatriated to Iran.

Despite Iran's repeated breaches of the nuclear deal, Tehran softened its initial position of slashing access for the International Atomic Energy Agency to a range of its nuclear related sites.

Under a deal struck over the weekend in Tehran by U.N. atomic chief Rafael Grossi, Iran agreed to provide footage and measurements of its declared nuclear facilities after several months if the U.S. lifts sanctions. It also agreed to provide footage of activities at sites that make key nuclear equipment, such as centrifuge rotors and uranium ore mines.

While the atomic agency will lose its daily access to sites where Iran is enriching uranium, it will be able to continue monitoring Iran's fissile material production and stockpile, and the purity of the uranium it produces through inspections. That will ensure the international community knows how much nuclear fuel Tehran has stockpiled that could be used in a nuclear weapon.

The agreement stabilizes the situation, Mr. Grossi said. "Other political consultations at other levels can take place," he said. "Most importantly, we can avoid a situation in which we would have been, in practical terms, flying blind."

--Aresu Eqbali, Andrew Jeong and Felicia Schwartz contributed to this article.

Write to Sune Engel Rasmussen at sune.rasmussen@wsj.com and Laurence Norman at laurence.norman@wsj.com

 

(END) Dow Jones Newswires

February 23, 2021 10:09 ET (15:09 GMT)

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