John Kerry and Iranian foreign minister still must sign off on package, but news on thorny issue points to progress as negotiators work to reach deal

World powers and Iran have reached tentative agreement on sanctions relief for the Islamic Republic, among the most contentious issues in a long-term nuclear agreement that negotiators hope to clinch over the next several days, diplomats said on Saturday.

The annex hammered out by experts, one of five meant to accompany the agreement, outlines which US and international sanctions will be lifted and how quickly. Diplomats said senior officials of the seven-nation talks, which include Secretary of State John Kerry and Iranian foreign minister Mohammad Javad Zarif, still had to sign off on the package.

Still, the word of significant progress indicated the sides were moving closer to a comprehensive accord that would set a decade of restrictions on Tehran’s nuclear programme in exchange for tens of billions of dollars in economic benefits.

Officials had described sanctions relief as one of the thorniest disagreements between Iran and the US, which has led the international campaign against Iran’s economy. The US and much of the world fears Iran’s enrichment of uranium and other activity could be designed to make nuclear weapons; Iran says its programme is meant only to generate power and for other peaceful purposes.

The diplomats, who were not authorised to speak publicly on this past week’s confidential negotiations in Vienna, said the sanctions annex was completed this week by experts from Iran and the six world powers it is negotiating with: the US, Britain, China, France, Germany and Russia. They did not provide details of the agreement.

A senior US official did not dispute the diplomats’ account but said work remained to be done on “Annex II” before the issue could be described as finalised.

Negotiators are striving to wrap up the deal by 7 July. Along with inspection guidelines and rules governing Iran’s research and development of advanced nuclear technology, the sanctions annex of the agreement had been among the toughest issues remaining to be resolved.

Iranian officials, including Supreme Leader Ayatollah Ali Khamenei, have made repeated demands for economic penalties to be lifted shortly after a deal is reached. Washington and its partners have said they will take action after Iran verifiably complies with restrictions on enrichment and other elements of the nuclear programme.

Much of the negotiation on the matter has concerned sequencing, so both sides can legitimately claim to have gotten their way. Several other matters related to sanctions also had posed problems.

The Obama administration cannot move too quickly to remove economic penalties because of Congress, which will have a 30-day review period for any agreement during which no sanctions can be waived.

American officials also had been struggling to separate the “nuclear-related” sanctions it is prepared to suspend from those it wishes to keep, including measures designed to counteract Iranian ballistic missile efforts, human rights violations and support for US-designated terrorist organisations.

And to keep pressure on Iran, world powers had been hoping to finalise a system for snapping suspended sanctions back into force if Iran cheats on the accord. Russia has traditionally opposed any plan that would see them lose their UN veto power and a senior Russian negotiator said only this week that his government rejected any automatic “snapback” of sanctions.