LONDON, June 5 (Reuters) - Here are the main issues between the United States and Iran as they seek a deal to end their war, which is now in its fourth month:
HORMUZ AND GULF BLOCKADE
Iran's closure of the Strait of Hormuz, normally the conduit for around a fifth of global oil and liquefied natural gas shipments, has caused an unprecedented oil supply shock, driving up fuel, food and fertiliser prices.
Reopening the strait is Washington's top priority and Tehran's main point of leverage, but it could
take time.
Many vessels are stuck in the Gulf and Iran says it has laid some sea mines that could be difficult to locate.
The U.S. blockade on Iranian ports is hitting Iran's own exports and state revenue. Lifting this is one of Tehran's main goals.
NUCLEAR
The U.S. says it believes Iran wants to build a nuclear bomb. Iran has always denied this, saying its atomic programme is for peaceful purposes only. The focus is on its enrichment of uranium, which generates fuel for nuclear power but can also make material for a warhead.
The nuclear question is extremely complicated. Iran has enriched some uranium to 60% purity - far beyond the 5% level used in most reactors for electricity - with other stocks enriched to 20%, 5% and 2%. It might eventually agree to dilute part of its highly enriched uranium in a friendly country into uranium enriched to 5% purity and then have it returned, Iranian sources said. But many other issues would still need to be addressed: how long the nuclear programme would be halted, whether nuclear sites would be dismantled, what happens to uranium it has enriched below the highest levels of purity, the future of Iran’s advanced centrifuges and the rules governing an inspections regime, among others.
BALLISTIC MISSILES
A prominent U.S. demand before the war was that Iran limit the range of its ballistic missiles so that they could not reach Israel. Iran has always said its right to conventional weapons is non-negotiable and that it still has a large arsenal.
SANCTIONS AND FROZEN ASSETS
Iran's economy has been hurt by sanctions for years, contributing to nationwide unrest in January. Tehran badly needs them to be lifted and for tens of billions of dollars of Iranian oil revenues frozen in foreign banks to be released. It also wants reparations for war damage.
The United States has resisted this, with Trump having lambasted former U.S. President Barack Obama for having returned some frozen assets to Iran under a 2015 nuclear deal. Some media have reported that the latest draft agreement would include an investment programme for Iran.
LEBANON
Iran has repeatedly said that Israel's war against its main ally Hezbollah in Lebanon must be included in any deal.
Israel and Lebanon agreed a ceasefire last month but both Israel and Hezbollah accuse each other of repeated violations and Israel's military is ramping up its campaign in southern Lebanon.
Israel would oppose any U.S.-Iran agreement that limits its ability to act in Lebanon.
(By Angus McDowall and Michael GeorgyEditing by Gareth Jones)
