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July 24, 2017

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Israel warns of war from Iran 'bad deal', sees big sanctions cut

NOT SO MODEST

U.S. President Barack Obama said last week that a first phase of any deal with Iran would involve "some very modest relief" from sanctions that would be easily reversible.

But Israel says the benefits to Iran would be greater than implied and Tehran would do little to curb its ambitions.

Netanyahu's point man on Iran policy, Strategic Affairs Minister Yuval Steinitz, said on Wednesday the relief package offered could lower the annual cost of sanctions to Iran by up to US$40 billion - out of a total annual cost of US$100 billion.

He gave no detail of his calculation and, given secrecy surrounding the Western offer, it could not be verified.

Steinitz said Israel believed the sanctions put in place by the United States and European Union last year cost Iran's economy around US$100 billion per year, or nearly a quarter of its national output.

"The sanctions relief directly will reduce between US$15 to US$20 billion out of this amount," Steinitz said at an English-language event hosted by the Jerusalem Press Club.

He also said that the proposed changes would make it more difficult to enforce sanctions overall, and that this could in the end provide a total benefit to Tehran of up to US$40 billion.

"The damage to the overall sanctions, we believe, will be something between US$20 billion and maybe up to US$40 billion," he said. "This is very significant. It's not all the sanctions. It's not the core sanctions about oil exports and the banking system, but it's very significant relief for the Iranians."

Asked about the. US$20 billion to US$40 billion estimate, U.S. State Department spokeswoman Jen Psaki told reporters: "that number, I can assure you, is inaccurate, exaggerated, and not based in reality."

Other Western officials contacted by Reuters declined to confirm or deny specific figures for the value of the sanctions relief on offer from the six powers and cautioned against revealing the terms of a possible deal at such an early stage.

"There is an offer on the table, and it seems to me that is considerable progress. We can't give any technical details and the day anything leaks out is the day someone wants the negotiations to fail," said one Western diplomat.

A European diplomat said details were being withheld on purpose: "A decision was made to keep everything quiet, tightly held," the diplomat said, "Because there are extreme positions on both sides that could use this to discredit the process and try to derail the negotiations."

After Obama discussed the negotiations by telephone with French President Francois Hollande, the White House dismissed talk of a rift with Paris. The two leaders were in "full agreement", it said in a statement, on an offer to Iran that was "a sound step toward assuring the international community that Iran's nuclear program is exclusively peaceful".

In words addressing those who question Iran's good faith, Hollande's office said in a statement: "The two heads of state expressed their common will to obtain from Iran guarantees that it is definitively abandoning its military nuclear program."

Secretary of State John Kerry warned the U.S. Congress, where some members share Israel's skepticism on Iran, that any move by the legislature to impose new sanctions could put an end to negotiations and "break them apart".

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