TEHRAN, Iran -- Iran is signaling a possible compromise offer heading into critical talks with world powers deeply suspicious of its nuclear program: offering to scale back uranium enrichment, but not abandon the ability to make nuclear fuel.

The proposal, floated by the country's nuclear chief before negotiations get under way Friday, suggested that sanctions-battered Iran is ready to bargain. But this gambit, at least, appeared to fall short of Western demands that Iran hand over its most potent nuclear material.

Still, the public jockeying ahead of the talks pointed to an attempt to ease a standoff that has rattled nerves and spooked markets with seesaw oil prices and threats of Israeli military strikes. The talks involving Iran and the five permanent UN Security Council nations plus Germany, to be held in Istanbul, are the first direct negotiations on Tehran's nuclear program since a swift collapse more than 14 months ago.

Despite far-reaching complexities, the dispute effectively boils down to one issue: Iran's stated refusal to close its uranium enrichment labs. The ideas put forth Sunday by the nuclear chief, Fereidoun Abbasi, are an attempt to at least acknowledge the huge divide. -- AP

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