By Parisa Hafezi
DUBAI (Reuters) - Iran's President Hassan Rouhani gave European powers another two months to save a 2015 nuclear deal on Wednesday, but warned that Tehran was still preparing for further significant breaches of the agreement if diplomatic efforts failed.
His statement came as Iranian officials appeared to give a guarded welcome to a French proposal to save the atomic pact by offering Iran about $15 billion in credit lines until the end of the year if Tehran comes fully back into compliance.
Rouhani said talks with European powers were moving forward, raising hopes of at least a pause in a diplomatic confrontation between Iran and the West that has stoked already heightened tensions across the region.
Iran emerged from years of economic isolation after agreeing a deal with world powers in 2015 to curb its nuclear development programme in exchange for sanctions relief. However, U.S. President Donald Trump pulled out of the deal last year, arguing it did not go far enough, and reimposed sanctions.
Tehran responded with two separate moves that breached some of the terms of the deal, although it says it still aims to save the pact.
Rouhani had threatened to take further measures by Sept. 5 unless France and the other European signatories of the pact did more to protect Iran from the impact of the U.S. penalties.
"I think it is unlikely that we will reach a result with Europe by today or tomorrow ... Europe will have another two months to fulfil its commitments," Rouhani said, according to state TV.
"The talks between Iran and European countries are moving forward ... but we have yet to reach a conclusion," he added.
Iran would continue with plans to breach the pact further and accelerate its nuclear activity, Rouhani said, without giving a fresh deadline.
"The third step (in reducing Iran's commitments) will be the most important one and it will have extraordinary effects," state TV reported him as saying.
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Iran's vital crude oil sales have plummeted by more than 80% under the U.S. sanctions.
The remaining signatories of the deal have been working to save an agreement that they say will bring Iran back into the international fold and prevent Tehran from developing a nuclear bomb.
Iran has repeatedly said its nuclear programme is for electricity generation and other peaceful purposes.
In a possible olive branch to the West, Iran state TV said authorities would free seven crew members of the detained British-flagged tanker Stena Impero.
The Swedish-owned tanker was detained by Iran's Revolutionary Guards on July 19 in the Strait of Hormuz waterway for alleged marine violations, two weeks after Britain detained an Iranian tanker off the territory of Gibraltar. That ship was released in August.
ADVERTISEMENTIran's Deputy Foreign Minister Abbas Araqchi appeared to back the main terms of the French proposal in a statement on Wednesday.
"Our return to the full implementation of the nuclear accord is subject to the receipt of $15 billion over a four-month period, otherwise the process of reducing Iran's commitments will continue," the semi-official news agency Fars quoted Araqchi as saying.
"Either Europe has to buy oil from Iran or provide Iran with the equivalent of selling oil as a credit line guaranteed by Iran's oil revenues, which in some sense means a pre-sale of oil," Araqchi added.
Government spokesman Ali Rabie said Iran would stick to its nuclear commitments "if France can get the approval of the U.S. and announces it." He added: "If they cannot get the approval, then we will take the third step."
The United States would have the economic clout to block any credit line for Iran. Washington has not commented on the proposal which would contradict its stated policy of imposing "maximum pressure" to force Tehran to rein in its nuclear and missile programmes as well as what the White House views as its destabilising regional behaviour.
ADVERTISEMENTIran's English-language Press TV issued a short report stating: "Iran has rejected a $15 billion loan offered by EU" - though Western and Iranian sources had described the French plan as the offer of a credit line, not a loan. Precise details of the plan have not been made public.
(Reporting by Parisa Hafezi and Dubai newsroom; Editing by Muralikumar Anantharaman, Clarence Fernandez and Andrew Heavens)