Iran standoff sees France winning Persian Gulf friends, influence

(Reuters) - France's tough line in major power talks with Iran may frustrate those looking for an early deal over Tehran's nuclear program, but is helping Paris to seal strategic new links with Gulf states and Israel.

Foreign Minister Laurent Fabius emerged just after midnight from Saturday's talks in Geneva to insist more work was needed to remove the risk of an Iranian nuclear bomb, rankling those Western allies who believed they were on the brink of an accord that has eluded negotiators for a decade.

France's bottom-line position should have come as little surprise to other negotiators heading to Geneva last week.

While President Francois Hollande's decision to pose for a photo opportunity with Iranian President Hassan Rouhani at September's U.N. General Assembly raised concerns in Israel, French officials were quick to insist that their negotiating stance would remain tough.

Fabius stressed then that Iran must suspend construction of its Arak heavy-water reactor and halt uranium enrichment to a concentration of 20 percent to win an easing of international sanctions that are strangling its economy.

Those were the same demands he cited at the start of the last day of talks on Saturday when he insisted France could not accept a "fool's game" handing Iran a cheap victory.

"We have not changed our position. It has always been clear and constant," a French diplomatic source said. "If the perception of Saudi Arabia and Israel is that the United States is more inclined for a deal without firmness, that is their analysis - but our position has always been the same."

U.S. Secretary of State John Kerry, alluding to criticism of the U.S. approach in Geneva, said on U.S. television: "We are not blind, and I don't think we're stupid. I think we have a pretty strong sense of how to measure whether or not we are acting in the interests of our country and of the globe."

France, a U.N. Security Council veto-holder, has long held out for strict terms trading a loosening of international sanctions on Iran's oil-based economy in return for commitments by Tehran to show its nuclear work is as peaceful as it asserts.

But the new element is the fear among Iran's foes Israel and the Gulf states that the United States has turned softer on Iran, leaving Paris as the leading defender of their interests.

As France struggles to reform its weak domestic economy and watches Germany increasingly shape European Union policy, that is a realignment full of welcome trade and diplomatic promise for Hollande's government.

"This is not just about arms sales ... but about strategic influence in the region," said Middle East specialist Shashank Joshi at the Royal United Services Institute (RUSI) in London.

"France can win influence with Saudi Arabia and Israel."

OUT ON A LIMB?

Kerry was quick to play down differences among the Western allies within the so-called "P5+1" grouping - Security Council veto-wielders Russia, China, the United States, Britain and France, plus Germany - that are stewarding the Iran diplomacy.

But one diplomat close to the talks accused Fabius of grandstanding. Veteran diplomat Carl Bildt, foreign minister of Sweden, tweeted: "Seems as if the most difficult talks in Geneva are not with Iran but within the Western group."

While Franco-U.S. relations have long since recovered from the lows reached in 2003 when Paris marshaled world opposition to the U.S.-led war in Iraq, new tensions have emerged.

French officials were disappointed when they saw Washington as being hesitant to support Hollande's January intervention in Mali to quash an insurgency by al Qaeda-linked rebels.

But they were even unhappier in August when, after much U.S. encouragement, they put French fighter jets within hours of bombing Syria to punish its use of chemical arms - only to be told by Barack Obama to stand down while he consulted the U.S. Congress, then to watch as his ardor for action cooled.

"Our American partners used to lecture us 15 years ago," said a senior French official. "Now, when it comes to the Middle East they are filled with uncertainty and doubt. That uncertainty gives us a card to influence our policy."

Paris points to a longstanding hard line on weapons proliferation as proof it is acting from a point of principle rather than to curry favor with the Gulf and Israel.

Yet with France only last week hit by a second sovereign debt downgrade from ratings agency Standard and Poor's over its failure to kickstart its sluggish economy, Paris does not hide the fact that it regards exports to the Middle East as a precious source of growth and jobs.

In October, France sealed a contract to modernize six naval ships and tankers from Saudi Arabia, having won in July one billion euros worth of contracts with the United Arab Emirates for anti-aircraft radars and military observation satellites.

French officials say they are also optimistic on securing a large deal to deliver anti-aircraft defense missiles to Riyadh and the sale of Rafale fighter jets to neighboring Qatar.

"The international context, our consistent position on Syria and our relations with Saudi Arabia have contributed to addressing the unimpressive military ties we once had," Defense Minister Jean-Yves Le Drian said just after the Saudi deal.

The question now is to what extent France is ready to go out on a limb and veto any possible nuclear deal with Iran, with a new round of talks set for November 20 - just as Hollande is scheduled to visit Israel and the Palestinian territories.

"The most difficult part of this conflict is not between France and Iran, it is between the United States and Iran," former defense minister Paul Quiles, a Socialist ally of Hollande, told Reuters.

"If the U.S. president is willing to seek a compromise, then it would be terrible if France prevents it."