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. Last Updated: 07/27/2016

World Leaders Seek Iran Incentives

VIENNA -- Iran on Thursday spurned a U.S. offer of direct talks on its nuclear program as major world powers sought agreement on incentives to coax it to scrap potentially weapons-related atomic work.

Iran's foreign minister, Manouchehr Mottaki, said Iran was open to talks with Washington, which severed ties with Tehran in 1980, but rejected a U.S. condition it stop enriching uranium first.

"We will not give up our nation's natural right [to enrichment], we will not hold talks over it. But we are ready to hold talks over mutual concerns," Mottaki said in Tehran.

Speaking before Mottaki's statement, a senior U.S. official said Tehran had only weeks to accept the diplomatic overture before facing sanctions.

Crude oil prices fell below $70 per barrel Thursday, deepening losses sparked by the U.S. offer of talks.

Iran says it wants to purify uranium only to run civilian atomic power plants. But, enriched to a higher level, uranium is the key ingredient in detonating bombs.

Defying United Nations Security Council calls for it to halt nuclear fuel work, Tehran announced in April that it had produced its first batch of enriched uranium.

Foreign ministers of the five permanent UN Security Council powers plus Germany and the European Union foreign policy chief were arriving in Vienna to put the finishing touches on incentives to persuade Iran to scale back its nuclear drive.

Washington's overture was a big policy shift that a senior U.S. official said had won over Russia and China to pursuing UN sanctions against Tehran if it spurned the sweeteners.

"What they've agreed is, if Iran does not accept this offer of negotiations or accepts and then does not negotiate in good faith, we will return to the Security Council, we will get a resolution," the official told reporters.

Russia, the Council power with the most leverage on Iran due to hefty trade relations, said the U.S. gesture presented "a real chance" to ease the crisis and urged Tehran to grasp it.

"We call on Iran to constructively respond to (the chance)," the Foreign Ministry said in a statement Thursday.

But Mottaki said Wednesday's proposal by U.S. Secretary of State Condoleezza Rice would not break the deadlock.

"Rice's statement was not something new. This is what was said in her previous speeches and interviews. It lacked a logical and new solution to resolve Iran's nuclear issue."

U.S. officials said Russia and China had come around to broad support for the "carrots and sticks" package drafted by the "EU3" -- France, Germany and Britain -- but details on how to balance the offer remained to be ironed out on Thursday.

Diplomats said the incentives were expected to encompass a light-water nuclear reactor and an assured foreign supply of atomic fuel so Iran would not need to enrich uranium itself.

Sanctions could entail visa bans and a freeze on assets of senior Iranian officials before resorting to trade measures.

Rice reiterated that a last-resort military option, should talks or sanctions prove futile, remained on the table.