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Iran talks stretch into another day; deal seen close, but elusive

By Louis Charbonneau, John Irish and Parisa Hafezi LAUSANNE, Switzerland (Reuters) - Major powers and Iran negotiated into the early hours of Thursday on Tehran's nuclear programme two days past their deadline, with diplomats saying prospects for a preliminary agreement were finely balanced between success and collapse. The negotiations, aimed at blocking Iran's capacity to build a nuclear bomb in exchange for lifting sanctions, have become bogged down over crucial details of the accord, even as the broad outlines of an agreement have been reached. After negotiators passed an original self-imposed deadline of midnight on Tuesday, they remained locked in talks through to the early hours of Thursday in the Swiss city of Lausanne. "It is going to be long," said a senior diplomat. "That was truly an all-nighter," Marie Harf, spokeswoman for U.S. Secretary of State John Kerry, said on her Twitter account, noting negotiators broke up at 6.00 a.m local time (0400 GMT) and would resume after a few hours. Kerry and German Foreign Minister Frank-Walter Steinmeier said they would stay at least until Thursday in an effort to seal the "political" agreement, a milestone towards a final pact due by the end of June. A German delegation source said Steinmeier would delay a trip to Estonia, Latvia and Lithuania. Late on Wednesday, Steinmeier warned that a collapse of the talks was possible, but said new proposals and recommendations were expected. Still, he cautioned that the onus was on Tehran to make them. Ministers and experts shuffled from meeting to meeting, but there appeared to have been no breakthrough. Kerry held meetings throughout the night with his Iranian, German and French counterparts, and European Union negotiator Helga Schmid. "We are moving," a surprisingly refreshed Iranian Foreign Minister Mohammad Javad Zarif told reporters as dawn broke. Zarif told reporters on Wednesday it was the major powers who must budge, not Tehran. "Progress and success of the talks depends on the political will of the other party ... and this is an issue they have always had a problem with," he said. Ali Akbar Salehi, head of Iran's Atomic Energy Organisation, told reporters: "We have made a lot of progress on the technical issues." In a potentially hopeful sign, French Foreign Secretary Laurent Fabius returned for more talks after flying back to Paris the previous day because progress had been too slow. "We are a few metres from the finishing line, but it's always the last metres that are the most difficult. We will try and cross them," he said on his return. "We want a robust and verifiable agreement and there are still points where there needs to be progress especially on the Iranian side." UNDER PRESSURE Six world powers - the United States, Britain, France, Germany, Russia and China - aim to stop Iran from gaining the capacity to develop a nuclear bomb. Tehran wants to lift international sanctions that have crippled its economy, while preserving what it views as its right to nuclear technology for peaceful purposes. The powers and Iran said they had moved closer, but both sides accused the other of refusing to offer proposals that would break the deadlock. The talks - the culmination of a 12-year process - have become hung up on the issues of Iran's nuclear centrifuge research, details on the lifting of U.N. sanctions and how they would be re-imposed if Iran breached the agreement. All sides are under pressure not to go home empty handed, but Washington reiterated on Wednesday it was willing to walk away if the sides couldn't agree on a preliminary framework. White House spokesman Josh Earnest told reporters in Washington: "the time has come for Iran to make some decisions." There were also signs that President Barack Obama, whose administration was behind the end-March interim deadline that was criticized by the French and others as an artificial one, was coming under renewed pressure to walk away from the negotiations. Republican senators John McCain and Lindsey Graham predicted the talks will not end well. "Any hope that a nuclear deal will lead Iran to abandon its decades-old pursuit of regional dominance through violence and terror is simply delusional," they said in a joint statement. The talks represent the biggest chance of rapprochement between Iran and the United States since the Iranian revolution in 1979, but face scepticism from conservatives in both nations' capitals. Washington's allies in the region, especially Israel and Saudi Arabia, are also deeply wary of any deal. Even if there is a preliminary deal, it will be fragile and incomplete and there is no guarantee of a final deal in the coming months. But Iran has repeatedly expressed optimism that an initial agreement was within reach, as has Russia, which with China is closest to Iran among the powers. A key goal of the talks for Washington is to impose conditions on Iran that would increase the "breakout time" Tehran would need to develop a nuclear weapon if it should decide to pursue one. (Additional reporting by Patricia Zengerle in Washington; Editing by Ian Geoghegan)