By Louis Charbonneau
UNITED NATIONS (Reuters) - Western nations are struggling to answer one key question as they assess conflicting signals from Tehran ahead of next week's big-power meeting with Iran in Geneva - is the Islamic Republic ready to make a deal on its controversial nuclear program.
While it is clear that Iran wants an end to the crippling international sanctions world powers have imposed on it for refusing to halt uranium enrichment and other sensitive atomic work, Western diplomats say it is not clear whether Tehran is prepared to significantly curtail its nuclear activities.
On the one hand, Iranian officials recently suggested in New York that they plan to present a new offer to six world powers on October 15-16 in Geneva, Western diplomats say. On the other hand, the Iranians have indicated the opposite - that they want a new offer from the six powers before proposing anything.
"Obviously they are very much worried about the sanctions," a senior Western diplomat said on condition of anonymity. "Obviously they want a lifting of the sanctions. But how much are they ready to pay? I don't know."
The main unknown, the diplomat said, is the position of Iran's Supreme Leader Ayatollah Khamenei: "Nobody knows the answer to the central question, which is whether Khamenei has decided to strike a deal."
Iran, which rejects allegations that its atomic program is aimed at giving it the capacity to produce bombs, has been negotiating unsuccessfully for years with the so-called P5+1 - the United States, Britain, France, Russia, China and Germany.
Iran's new centrist President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif met with dozens of delegations, many of them European, on the sidelines of the U.N. General Assembly in New York last month. Tehran's nuclear program was one of the main topics of discussion.
"There were a lot of smiles," said another Western diplomat who attended a meeting with Zarif. "But what does it all mean? Are we ready to make a nuclear deal? We just don't know."
According to the senior diplomat, the Iranian charm offensive during the General Assembly sparked a flurry of internal analyses in Western capitals among "all the Iranian specialists, like at the time of the (Soviet Union's) Kremlin."
He compared the blizzard of studies of Iranian behavior and comments to the days when former Soviet Communist Party Chairman Yuri Andropov was considered by Western Kremlinologists as "a liberal because he was drinking whiskey."
Sometimes symbols matter.
The most significant piece of symbolism during the U.N. General Assembly, Western officials say, was Rouhani's telephone call with U.S. President Barack Obama, the first conversation between the heads of governments of the two estranged nations in over three decades.
They said it showed the taboo against Iranian-U.S. contact had been broken and both voiced a willingness for dialogue.
So what are the Iran "Kremlinologists" predicting Tehran will bring to the table next week? There is no consensus.
"They (Iran) have said they are going to bring new proposals to the table," the senior Western diplomat said. That is consistent with public comments of Rouhani, who said Iran would bring its plan for resolving the nuclear standoff to Geneva.
According to an intelligence assessment of Rouhani prepared by a Western country, Iran might be willing to take some concrete steps in the interest of securing sanctions relief, including halting medium-level 20-percent uranium enrichment and freezing the expansion of its nuclear centrifuge program.
But the diplomat who described the intelligence assessment said there were limits to how far Rouhani would allow Zarif to go in negotiating with the six powers.
"Rouhani will likely be willing to make more compromise offers than before," the diplomat said. "But he believes Iran won't have to make significant concessions on its nuclear project in practice."
Rouhani led unsuccessful negotiations between Iran and Britain, France and Germany in 2003-2005 when he was secretary of Iran's Supreme National Security Council.
Another person who attended a meeting with Zarif in New York said the Iranians indicated they would not be presenting any new proposals at the Geneva meeting but were expecting a new offer from the six powers.
That is consistent with public comments Zarif made a few days ago - that the six powers, not Iran, must come up with new proposals.
"If that's what happens, the most we might get from Geneva is an agreement to meet again," the participant in the meeting with Zarif told Reuters on condition of anonymity.
The Western powers said in February they want Iran to stop enrichment of uranium to 20 percent, ship out some uranium stockpiles and shutter a facility where such enrichment is done.
PETROCHEMICALS AND PRECIOUS METALS
In return, they offered relaxation of international sanctions on Iran's petrochemicals and trade in gold and other precious metals.
One Western diplomat noted that the offer of trade in gold and other metals may no longer be workable due to new U.S. sanctions that took effect in July.
But even if there is no outcome from next week's meeting in Geneva, the six powers and Iran will likely keep at it.
"The Iranians aren't going to walk away from the table," a diplomat said. "But neither are the others. The Iranians know the Americans and Europeans want a deal."
If there is a nuclear deal with the major powers, diplomats said, it would likely follow a bilateral U.S.-Iranian agreement. The two nations have not had diplomatic relations since 1980.
All of the Western diplomats cited in this article were skeptical about the possibility of reaching a deal with Iran, which Rouhani said he wants in as little as three to six months.
Western officials also expressed caution, however, about dismissing hopes that Iran, fed up with sanctions that are damaging its economy, might now want an agreement.
Khamenei, who the final say on all domestic and foreign policy matters in Iran, has said he supports Rouhani's diplomatic initiatives. Still, he cautioned that some aspects of what happened in New York last month were "not proper" and the United States could not be trusted.
Khamenei - the ultimate arbiter of high state policy under Iran's unwieldy dual system of clerical and republican rule - said before Rouhani's trip to New York that he supported "heroic flexibility" in diplomacy, while cautioning that the Islamic Republic must always remember who its foes are.
A senior Western diplomat said it was not clear what Khamenei meant by "heroic flexibility." But he speculated that it could mean he is preparing Iranians to drink a "cup of poison," as his predecessor, Ayatollah Ruhollah Khomeini, described it when he reluctantly agreed to a U.N.-mediated truce that ended the 1980-88 Iran-Iraq war.
"I'm wondering whether by speaking about 'heroic flexibility' Khamenei is not preparing his public opinion for a move comparable to what has happened in 1988," the diplomat said.
(Editing by Alistair Bell and Christopher Wilson)