After a long diplomatic drought, two sets of talks over Iran's nuclear programme have been on display this week. One set, with the International Atomic Energy Agency (IAEA), involved questions about Iran's past nuclear activities, and continuing issues of transparency. The other set of negotiations, with the six major powers (France, Germany, UK, China, Russia and US, known as the E3+3 or P5+1), is focused on current and future Iranian nuclear activities.

In both forums, Iran's negotiating partners have made initial concessions over matters of process. Such compromises on issues of venue and timing can sometimes pave the way for better deals on matters of substance. They created good mood music in the prelude to the Iran-E3+3 talks in Baghdad that began yesterday. Overdoing it, however, could lead to disappointment.

The IAEA director general, Yukiya Amano, flew to Tehran for meetings on Monday. He had hoped to nail down an agreement that would allow Agency access to a large blast chamber at the Parchin military site where Iran allegedly conducted nuclear explosives-related experiments a decade ago. This is one of several nuclear activities of a "possible military dimension", as the IAEA diplomatically calls it, for which Iran has refused to provide satisfactory answers. Access to Parchin is urgent because of Iran's recent efforts to cleanse the facility of any incriminating residue.

IAEA officials thought access would be granted when they visited Tehran in late January and early February. But Iranian hardliners posed unacceptable conditions, insisting, for example, that the IAEA forego the right to revisit issues if new information arose. Mr Amano should not have given Iran the honour of a visit this week if he didn't have good reason to believe those conditions would be dropped.

It was surprising when Mr Amano returned to Vienna without a deal, saying on Tuesday an agreement would be signed soon. It apparently was held up until Iran could see what was on offer by the E3+3.

The six major powers had agreed to Iran's insistence on meeting in Shiite-friendly Baghdad despite the practical difficulties. They also agreed to a five-week interval since the parties last met. At that earlier meeting in Istanbul, the E3+3 also agreed that negotiations would be conducted within the framework of the Nuclear Non-Proliferation Treaty. This supported Iran's claim to the right to enrich uranium, which is not prohibited by the treaty.

Those concessions led Iran to tout success and to enter the Baghdad talks in a positive frame of mind. That is to the good - no negotiation can succeed unless both sides feel better off with the outcome. And Iran made concessions of its own by agreeing to discuss its nuclear programme without preconditions, something it last year promised never to do.

The danger is that Iran, feeling in a position of power, will exaggerate the gains it can expect from the Baghdad talks. Therein lies the reason Mr Amano was sent home without a deal: Iran hopes to use concessions to the IAEA as leverage to extract more from the E3+3.

The proposal being offered by the E3+3 is a set of mutual confidence-building measures. Iran is asked to stop the 20 per cent enrichment underway mostly at the deeply buried facility at Fordow, and not to commence any other enrichment operations there. In addition, the stockpile of 20 per cent enriched uranium must be made unavailable for weapons use, ideally by exporting it to Turkey or elsewhere, or by chemical conversion to a form unusable for weapons. The IAEA quarterly report due out on Friday will tell us how much 20 per cent enriched product Iran has.

In exchange, Iran would receive fuel to run the Tehran Research Reactor, which is Iran's ostensible reason for the 20 per cent enrichment, and some form of sanctions relief. What forms this relief would take is not yet clear, but it may include postponing the EU ban on insurance for ships that carry even a small amount of co-mingled Iranian oil. That concession is mutually beneficial because otherwise too much oil will be removed from the market, hiking prices. Iran will also receive an implicit recognition of the right to enrich uranium below 20 per cent.

Iran wants more than this. Whereas President Mahmoud Ahmadinejad last autumn proposed to stop 20 per cent enrichment in exchange only for research reactor fuel, Iranian leaders now insist on the lifting of the EU oil embargo and the US-led ban on dealing with Iran's Central Bank. Both measures are formally set to take effect around July 1. Claiming it can fabricate fuel on its own, Iran says it no longer needs foreign fuel. But the ballyhooed production of a fuel plate in February was a ruse. Whatever it was that was produced was not safe to use.

Iran's negotiating position is an overreach. The West can forego further sanctions only if Iran foregoes progress towards a nuclear weapon capability. A "freeze for freeze" would require no more centrifuges, for example, and no more work on advanced models, with better IAEA monitoring. Removal of sanctions, which would be an impossible sell in Washington during an election year, has to await later negotiations on rolling back Iran's nuclear programme to an acceptable level.

The agenda for Baghdad is only an initial set of confidence-building measures. Stopping 20 per cent enrichment and other operations at Fordow with proportionate benefits for Iran would give both sides the confidence they will need if the harder, more comprehensive issues are to be tackled later on. A successful beginning in Baghdad would also relieve the immediate concerns in Israel about Iran's programme entering a "zone of immunity" that sparks consideration of an unwise bombing option.

The Baghdad talks will probably require one or more additional meetings before any concrete results can be nailed down. But if the process drags on too long - say, beyond midsummer - without any limits on Iran's nuclear activities, diplomacy will be seen in Israel and many sectors of the US as having failed. Talk of mutual confidence building will then turn back to talk of other options on the table that would only bring mutual catastrophe.


Mark Fitzpatrick is the director of the Non-Proliferation and Disarmament Programme at the International Institute for Strategic Studies and author of The Iranian Nuclear Crisis: Avoiding worst-case outcomes