Iran deal progress dampens push for new US sanctions Bill

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* Strong core of powerful Democrats oppose new sanctions bill

* White House in strong push to bolster Democratic opposition to measure (Adds more on bill in paragraph 2, McCain comment and background, paragraphs 9-12.)

By Patricia Zengerle and Timothy Gardner

WASHINGTON, Jan 13 (Reuters) - President Barack Obama is more likely to win his battle with the U.S. Congress to keep new sanctions on Iran at bay now that world powers and Tehran have made a new advance in talks to curb the Islamic Republic's nuclear program.

Despite strong support for a bill in the Senate to slap new sanctions on the Islamic Republic, analysts, lawmakers and congressional aides said on Monday that the agreement to begin implementing a nuclear deal on Jan. 20 makes it harder for sanctions supporters to attract more backers.

Senator Richard Blumenthal, a Connecticut Democrat, was one of several of the 59 co-sponsors who said there is no clamor for a vote any time soon.

"I want to talk to some of my colleagues. I'm encouraged and heartened by the apparent progress and certainly the last thing I want to do is impede that progress. But at the same time, sanctions are what has brought the Iranians to the table," he told reporters.

Sixteen of Obama's fellow Democrats are among the co-sponsors of the measure requiring further cuts in Iran's oil exports if Tehran backs away from the interim agreement, despite Iran warning that it would back away from the negotiating table if any new sanctions measure passed.

The current list of supporters is close to the 60 needed to pass most legislation in the 100-member Senate.

"20 makes it harder for sanctions supporters to attract more backers.Senator Richard Blumenthal, a Connecticut Democrat, was one of several of the 59 co-sponsors who said there is no clamor for a vote any time soon."I want to talk to some of my colleagues"But 67 votes would be required to overcome a veto, which Obama has threatened as he tries to reach a wider agreement with Iran to prevent it from developing an atomic bomb.

"The prospects for a diplomatic solution could implode if Iran leaves the table or if Iran responds with their own provocative actions," said Colin Kahl, who served as a Middle East expert at the Pentagon until 2011 and now teaches security studies at Georgetown University.

"Even if neither happens, Iran's moderate negotiators would likely harden their negotiating positions in the next phase to guard their right flank at home against inevitable charges of American 'bad faith,' making a final compromise harder to achieve," he said.

The bill in the Senate would cut Iran's oil exports to almost zero two years after enactment, place penalties on other industries and reduce Obama's power to issue a waiver on Iran sanctions, if Iran were to break the interim deal.

Supporters say it is necessary to pass a bill now rather than wait to see if Iran complies with the agreement in order to pressure Tehran to negotiate in good faith and not to keep developing nuclear weapons while talks continue.

"If the Iranians have their way, they'll drag it out forever," Arizona Senator John McCain, a Republican co-sponsor of the measure, told reporters.

Iranian officials say their nuclear program is peaceful.

Democratic Senator Robert Menendez of New Jersey and Republican Mark Kirk of Illinois, the measure's lead sponsors, are trying to attract more supporters, hoping to pressure Senate Majority Leader Harry Reid to allow a vote on the legislation.

Pro-Israel lobbying groups, convinced that Iran cannot be trusted, are also pushing lawmakers to sign on in the hope of increasing the pressure on Reid, a Nevada Democrat, to let the bill move ahead.

But there is no guarantee that all the senators who co-sponsored the sanctions move would actually vote for any final bill, and even less that Democrats would override a veto by a president from their own party.

Backers of the sanctions bill said they could force Reid's hand by putting a hold on nominations by the administration - such as dozens pending for State Department positions.

But Senate leadership aides - including Republicans - acknowledge that the chamber's rules give Reid enough leeway to block any action.

DEMOCRATS IN LINE

Stopping - or delaying - new sanctions is also made easier because there is a strong core of lawmakers - including senior Democrats - who strongly oppose them. Ten powerful committee chairs signed a letter in December opposing the new sanctions, and none of those 10 has changed position.

An aide to Menendez, who is chairman of the Senate Foreign Relations Committee, said there had been no indication by Monday on when the sanctions bill might come to the floor.

Analysts said there had been real concern about a delay in implementing the interim agreement reached in Geneva between Iran and the so-called P5+1 powers in November.

But Sunday's announcement of the start date eases those fears.

"It shows that they are moving ahead, and what that means is that Iran's not delaying, which was a fear," said Michael Adler, an expert on Iran at the Wilson Center think tank in Washington.

The interim six-month agreement freezes Iran's most sensitive atomic work - higher-level enrichment - in return for an estimated $7 billion in relief from sanctions.

It appeared to arrest a drift toward possible military strikes on Iran by the United States or Israel.

The Obama administration has been pushing U.S. lawmakers hard not to support the Senate sanctions bill. Wendy Sherman, the Under Secretary of State for Political Affairs, and the lead U.S. negotiator with Iran, held a conference call with lawmakers and senior staff on Sunday night.

State Department officials held another on Monday morning, and congressional staff members said they anticipated one or more classified briefings for lawmakers during the week.

Obama has also invited the entire Senate Democratic caucus to the White House on Wednesday evening for a discussion of issues expected to include Iran, congressional sources said.

Obama on Monday called on Congress to hold off and said the international community will be able to verify whether Iran is complying with the interim deal.

"My preference is for peace and diplomacy and this is one of the reasons why I've sent a message to Congress that now is not the time for us to impose new sanctions," Obama told reporters.

"Now is the time for us to allow the diplomats and technical experts to do their work."

Iran and the P5+1 countries - the United States, Russia, China, France, Britain and Germany - will likely meet again in February. (Additional reporting by Richard Cowan; Editing by Alistair Bell, Peter Henderson and Eric Walsh)

FILED UNDER: Energy

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