Iran has slowed the advance of its nuclear program for the first time in years, UN inspectors report, in a move likely to improve chances of reaching a deal when negotiations resume in Geneva next week.

The report by the International Atomic Energy Agency (IAEA) covers most of the first three months in office of President Hassan Rouhani, a centrist who has vowed to resolve Iran’s nuclear dispute with world powers and ease sanctions that have crippled Iran’s economy.

Iran has continued to enrich uranium – the process that most worries Western negotiators because the material could be used to make a bomb if purified to higher levels. But it added only modestly to its stockpile, according to the report issued late Thursday by the IAEA, the UN nuclear watchdog. And Iran appears to have not expanded existing enrichment capacity nor installed critical components at its Arak heavy water reactor.

Those steps appear designed to signal goodwill as talks reach a critical point. Until now, skeptics of Mr. Rouhani's outreach toward the US and the West have noted little concrete evidence to match the positive rhetoric. While those skeptics remain numerous – especially in the US Congress, Israel, and the Persian Gulf – slowing Iran's nuclear program could add heft to the argument that Iran is serious about change.

The US and other world powers want to seal an initial six-month deal that would halt Iran’s nuclear progress while they hammer out a comprehensive agreement. After years of steady advances – former President Mahmoud Ahmadinejad once likened Iran’s nuclear effort to a train hurtling forward with no brakes – experts expressed surprise at the slowdown.

“It’s very significant; it’s the first time in several years there is no progress in Iran’s enrichment capability, or any progress in the Arak reactor,” says Mark Fitzpatrick, a nonproliferation specialist at the International Institute for Strategic Studies in London. “So this was very obviously a political decision, to show that the first IAEA report about Iran’s activities during Rouhani’s tenure showed that he can cap the activity, that he is willing to accept some limits.”

Mr. Fitzpatrick, a former US State Department official for 26 years, says this "matches the Obama administration’s effort to restrain Congress from imposing new sanctions ... both are trying to show that they can work toward a deal. I think it bodes well for a deal.”

Stumbles

Last week, three days of unprecedented high-level talks in Geneva narrowly missed reaching an agreement. Talks stumbled over demands by the P5+1 group (the US, Russia, China, Britain, France, and Germany) to shrink Iran’s most sensitive enriched stockpile and freeze work on the Arak reactor; and Iran’s demand that its “right” to enrich be recognized.

The Obama administration believes talks have reached a critical point and has pushed hard on Capitol Hill to prevent Congress – spurred on by the pro-Israel lobby, and Israeli Prime Minister Benjamin Netanyahu himself – from imposing new sanctions that the White House believes will push Iran away from the table. The IAEA report provides the first concrete sign of change from Iran under Rouhani, which will be ammunition to Obama administration officials accused by some in Congress of giving away too much to Iran for nothing in return – a charge that administration officials hotly deny.

The IAEA report shows that in the past three months Iran added four old-style IR-1 centrifuges for enriching uranium to its total of 19,466, after previously installing roughly 1,800 in the previous three-month reporting period.

During the latest reporting period Iran has not installed any new second-generation IR-2 centrifuges – which can enrich uranium 3 to 4 times more efficiently. And the number of centrifuges actually enriching uranium dropped, from some 9,200 in August to about 8,700 today.

Iran’s stockpile of uranium enriched to 20 percent – an enrichment level that will almost certainly be prohibited in any deal, because it is just a few technical steps away from weapons-grade – grew by just 10kg to 196kg, reports the IAEA, because nearly three-quarters of what Iran produced was immediately converted for use as fuel, making any weapons use far more difficult.

The Arms Control Association (ACA) in Washington says this amount is “well below the required amount which, when further enriched, is enough for one nuclear weapon.”

Fumbles

The IAEA report “is a reminder of the risk posed by not securing a ‘first phase’ agreement to halt Iran’s progress,” argues an ACA analysis. While it shows that Iran “has made a political decision to pause the expansion of its enrichment abilities, it could quickly reverse course and nearly double its number of operating centrifuges if a first phase deal is not reached soon.”

Besides Iran capping enrichment capacity since August, the IAEA report notes little change in the status of the unfinished Arak reactor – a facility that has experienced multiple delays and was an issue at the Geneva II talks when the French insisted on more safeguards.

New piping has been connected, but in the last three months “no other major components, such as control room equipment, the refueling machine and reactor cooling pumps, had been installed,” the IAEA reported.

The Arak facility is another potential path to a bomb, because of the plutonium it will eventually produce. But the IAEA says in the last three months Iran has not completed the 11th fuel assembly of the 150 that are necessary – a delay that is likely to be codified as part of any Geneva deal.

Earlier this week the IAEA also signed a framework agreement that included “six initial practical measures” – the first progress after nearly two years of Iran-IAEA talks, which will enable more IAEA access and help resolve unanswered questions about possible past weapons-related work.

IAEA chief Yukiya Amano signed the deal in Tehran, but said that “much more needs to be done.”

Distrust

Netanyahu said he was “not impressed” with the Iranian slowdown. Netanyahu – who has disparaged Rouhani’s overtures to the West, called Iran’s new president a “wolf in sheep’s clothing,” and demanded that Iran dismantle its entire nuclear program – said that Iran already had all the tools to build a nuclear weapon.

“They’ve got enough facilities, enough centrifuges to develop and to complete the fissile material which is at the core of an atomic bomb,” said the leader of Israel, which has the only nuclear arsenal in the Middle East.

Israel’s skepticism is echoed in Congress, where lawmakers this week criticized the potential deal, asked how the Obama administration could talk to the “butchers” in Iran, and even made references to 1938 appeasement and Nazi Germany.

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“Some members of Congress appear determined to put more sanctions on Iran until it is ready to totally capitulate,” says Fitzpatrick of IISS. “And anybody who knows anything about Iran, knows that that is not going to happen.”

“I think members of Congress – those who are willing to look at things without bias – should see that we do have a partner in Rouhani, willing to at least accept some tactical limits,” adds Fitzpatrick. “I don’t think it is any change in their overall strategy, but he’s somebody you can make a deal with.”