By Fredrik Dahl
VIENNA (Reuters) - Iran appears ready to help allay international concerns that a planned research reactor could yield nuclear bomb material, raising hope for a compromise on a tough sticking point in negotiations with world powers.
How to deal with the Arak plant is expected to be among several thorny issues to be tackled in this week's round of talks between Iran and the six global powers in Vienna, with the aim of resolving the decade-old nuclear dispute by late July.
"There is more than one way to address this, and it is going to take some creativity," Jim Walsh, a research associate at the Massachusetts Institute of Technology (MIT), said. "Ultimately, I think this is a manageable issue - one way or another."
Possible options that could allow Iran to keep the reactor at Arak while satisfying the West that it would not be used for military purposes include reducing its megawatt capacity and altering the way it will be fuelled.
"There are different ways of making sure that the reactor can't produce large quantities of plutonium," said Gary Samore, until last year the top nuclear proliferation expert on U.S. President Barack Obama's national security staff.
"I think it is much easier for the Iranians to compromise on a research reactor than it is for them to compromise on the enrichment program," Samore told Reuters, referring to Iran's existing, and much larger, operations to refine uranium.
Western powers fear Arak could provide a supply of plutonium - one of two materials, along with highly enriched uranium, that can trigger a nuclear explosion - once operational.
The Islamic Republic has said that the 40-megawatt, heavy-water plant is aimed at producing isotopes for cancer and other medical treatments, and has denied that any of its nuclear activity is geared to developing a bomb.
Their positions seem far apart: Iran has ruled out shutting down any nuclear site, including Arak. The United States says it sees no need for Arak as part of a civilian nuclear program.
The head of Iran's atomic energy organization last month said it was prepared to modify Arak, while insisting he did not believe Western concerns over Arak were genuine, calling them a "fabricated fire" used to put Iran under political pressure.
"We can do some design change ... in order to produce less plutonium in this reactor, and in this way allay the worries and mitigate the concerns," Ali Akbar Salehi said.
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A U.S. administration official said Washington was "pleased to see ... Salehi say that they were open to discussions of whether there were modifications that would be viable.
"I think we have a long way to go in these discussions, but I think that we all have to be open to ideas and ways to address our concerns," the senior U.S. official said on February 17.
Salehi did not spell out what kind of alterations he might have in mind, and Samore said it was "very unclear" whether Iran would be willing to undertake the big changes to the reactor core that would be required to address Western misgivings.
"Presumably the Iranians will want to make fairly cosmetic changes that would allow them to run the reactor at much higher power levels and therefore to produce more plutonium," he said.
In contrast, the powers - the United States, France, Germany, Britain, China and Russia - "will want to make pretty extensive and fundamental changes to the reactor that won't be easily reversible."
A diplomat from one of the powers, hinting at the need for a face-saving compromise, said some sort of "linguistic engineering to hide modifications that enable us to lessen the proliferation problems" would be required for Arak.
Heavy-water reactors, fuelled by natural uranium, are seen as especially suitable for yielding plutonium. To do so, however, a nuclear reprocessing plant would also be needed to extract the plutonium. Iran is not known to have any such plant.
If operating optimally, Arak could produce about nine kg (20 pounds) of plutonium annually, enough for about two atom bombs, the U.S. Institute for Science and International Security says.
Any long-term deal must lower that amount, experts say.
"The single most important modification that reduces plutonium production is to decrease the power level," Samore said. In addition, "it would be advantageous to change the fuel from natural uranium to low-enriched fuel because that produces less plutonium and of a somewhat different quality."
If Arak were to be converted to use low-enriched uranium, it
would "essentially be de-fanged," nuclear expert Mark Hibbs of the Carnegie Endowment think-tank said.
Another possible way forward, according to MIT's Walsh and the Arms Control Association research and advocacy group, would be to send Arak's spent fuel abroad, possibly to Russia, to make sure Iran did not draw plutonium out of it.
The fate of Arak was a big hurdle in talks last year that led to a landmark agreement to curb sensitive aspects of Iran's nuclear program in exchange for some easing of sanctions.
Under the interim pact that took effect on January 20, Iran pledged to not install any more reactor components or produce fuel for the plant during the six-month period of the deal.
But allowing Iran to keep Arak in any shape or form may anger Israel as well as some lawmakers in the U.S. Congress, which has generally taken a tougher line on Iran than President Barack Obama. Israel regards Iran as a mortal threat. The Islamic Republic says it is Israel's presumed nuclear arsenal that endangers peace and stability in the Middle East.
U.S. nuclear expert Gregory Jones of the Nonproliferation Policy Education Center said the United States should insist that Arak is never completed and its components destroyed.
"Otherwise the U.S. will be granting Iran a 'plutonium option' for acquiring nuclear weapons in addition to the dangers posed by Iran's centrifuge enrichment program," he said.
(Editing by Mark Heinrich)