Nuclear negotiations with Iran in Vienna stalled in recent weeks following disagreements over limits on Iran's enrichment capacity and how long those limits should last. All sides at the talks are prepared to extend them beyond Sunday's deadline, but an extension faces significant opposition in the US Congress.
The proposed extension would last four months, but there is a dispute in Vienna over what the terms of that extension would be. Iran wants more of its assets from oil sales held in western banks to be unfrozen during the extended negotiation. The US wants Tehran to reduce its stockpile of enrichment in return. The argument has held up an announcement of the extended deadline, with US and Iranian officials haggling until 1am and resuming discussions later on Friday morning.
Iranian negotiators put forward a compromise package over the past two months and have expressed frustration at what they portray as inflexibility on the part of the six world powers involved in the talks – the US, UK, France, Germany, Russia and China, convened by the EU foreign policy chief, Cathy Ashton.
The Iranian proposal, put forward by the foreign minister, Mohammad Javad Zarif, involves freezing the country's capacity to enrich uranium at its current level, of about 10,000 centrifuges, for a period of seven years, after which it would be able to run a peaceful nuclear energy programme without special limits.
The initial position taken by Washington, which is taking the lead in the six-nation negotiating group, is that Iran should reduce its capacity to 1,500 centrifuges for 20 years. When the US secretary of state, John Kerry, joined the talks on Sunday, that offer was increased to up to 6,000 but he did not compromise on the minimum 20-year lifespan for the special restrictions on the Iranian programme.
Zarif is said to have argued that to dismantle centrifuges, closing down much of Iran's enrichment plants and therefore dismissing many of the people involved in the industry, would be seen as a stinging humiliation in Iranian eyes. He suggested an array of other measures aimed at reassuring the international community that Iran could not build a bomb at short notice, in just a few months.
Those measures included converting almost all of Iran's stockpile of reactor-grade uranium from gas to an oxide solid of the sort used in nuclear power stations, and an agreement not to build the factory necessary to turn the solid back into a gas form which would be essential for enriching the uranium further to weapons grade.
The Iranians argued that all those measures together would meet Washington's stated objective of making sure Iran could not build a weapon. Iranian officials have accused the Americans of focusing on just a couple of variables and being inflexible about those.
Western officials argued that in maintaining their refusal to reduce enrichment capacity, it is the Iranians who are being inflexible. In the last few days of the talks, however, some hints at flexibility began to emerge, in which Iran would do more to disable the roughly 9,000 additional centrifuges it has on standby and both sides could find a compromise on the number of centrifuges operating during the freeze period. That was just about enough to justify an extension, but not enough to clinch a deal in the last few days remaining in Vienna.
On other issues, there was more convergence. Iran offered to make design changes to the heavy water reactor it is building near the town of Arak, so that it produced 2kg of plutonium – another possible route to building a bomb – in its spent fuel each year, and agreed for the spent fuel to be exported. That was a reduction from the 9kg-a-year capacity of the old design. But the six-nation negotiating group wanted that reduced to 1kg a year.
As for Iran's underground enrichment plant at Fordow, which the west wanted closed down, Iran suggested it could be used for research and development for small numbers of centrifuges under constant international supervision.
Iran also signalled that it was willing to accept an enhanced inspection regime from the International Atomic Energy Agency (IAEA) in which Tehran would comply with a rule requiring it to report any new nuclear projects at the point when they are first designed. It would sign an agreement called the additional protocol, allowing IAEA inspectors much more intrusive inspections. Lastly, the IAEA would be arbiter and monitor of whatever comprehensive deal is agreed between Iran and the six powers.
Lastly, the Iranians have expressed willingness to consider entering joint ventures with foreign companies to build civilian nuclear reactors. Such joint ventures, they argue, would provide another level of confidence to the outside world that the programme is peaceful.
On one issue, the Iranians are closer to the Americans than to the Europeans. Both Tehran and Washington want to resume negotiations in mid-August. The Europeans would prefer to take the whole of August off.
In Washington, meanwhile, Barack Obama and Kerry have been struggling to convince a sceptical Congress to agree to an extension to the talks, hindered by the problem that they cannot fully illustrate their claims with details for fear they would leak and give away western and Iranian negotiating positions.
The administration does not require congressional approval for more talks, but if the US legislature imposes more sanctions, it could torpedo the negotiations. The House of Representatives has already prepared a new sanctions bill that could be presented as early as Monday, although it is unlikely to be passed by the Senate. Iranian officials have said that in the event of more punitive measures, Tehran would no longer feel bound by an interim agreement struck in November, under which it has observed strict limits on its nuclear programme in return for the gradual unfreezing of its assets.
Obama said this week there was a "credible way forward" in the negotiations, adding that there were "still some significant gaps" that required more work. Republicans and Democrats in Congress, however, have signalled that they view a prolongation of the talks as allowing Iran to play for time.
The Republican chairman of the House foreign affairs committee, Ed Royce, highlighted the persistent of gaps between the two sides, and said he hoped "the administration will finally engage in robust discussions with Congress about preparing additional sanctions against Iran".
The senior Democrat on the committee, Elliot Engel, also contradicted the administration in saying that the Iranian offer on the table "doesn't give negotiators much to work with". He said: "After six months of negotiations, I'm disappointed that the Iranians continue posturing rather than working toward a real solution."
Kelsey Davenport, a nonproliferation analyst at the US-based Arms Control Association, who has been monitoring the talks in Vienna, said: "Significant progress has been made on a number of tough areas, and if both sides remain focused and are willing to consider creative solutions, they can bridge the remaining gaps with a short extension. Congress needs to do its part to help bridge those gaps … This is no time for posturing or playing bad cop. Policymakers must remember that the alternative to a good deal is an unconstrained Iranian nuclear programme with less international oversight."