UPDATE 3-Iran seeks end to sanctions at talks, hits out at France

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* Iran, 6 world powers to meet in Baghdad on May 23

* Islamic Republic says "optimistic", wants sanctions lifted

* West suspects Iran is seeking nuclear arms capability

* Iran sees Western double standards

By Fredrik Dahl and Marcus George

VIENNA/DUBAI, May 2 (Reuters) - Iran said on Wednesday it would seek an end to sanctions over its nuclear activities at talks with big powers later this month and it sought to turn the tables on its Western foes by accusing France of helping Israel develop "inhumane nuclear weapons."

An adviser to Iranian Supreme Leader Ayatollah Ali Khamenei said the negotiations in Baghdad on May 23 should lead to the lifting of punitive measures on Tehran, Iranian media reported.

The comments reflect a hardening public line in the Islamic Republic that an end to sanctions is vital to the success of the talks. It was also the first time an influential political figure explicitly said he expects progress on the issue.

"At the least, our expectation is the lifting of sanctions," Gholam-Ali Haddad Adel was quoted by Iranian media as saying.

However, the United States and its allies have made clear Tehran must take action to allay their concerns about its nuclear ambitions before they can consider relaxing sanctions.

They say Iran's nuclear programme is a cover for developing atomic bombs and want verifiable assurances to the contrary from Tehran - for example, by accepting much more intrusive U.N. nuclear inspections and curbing its enrichment capacity.

Iran denies having a weapons agenda, saying it is enriching uranium solely for peaceful energy purposes.

Western states have imposed expanded, more biting sanctions against Iran's energy and banking sectors since the beginning of this year. The European Union is preparing to slap a total embargo on the purchase of Iranian crude oil in July.

In Vienna, Iranian Deputy Foreign Minister Mohammad Mahdi Akhondzadeh said nuclear weapons have no place in Iran's defence doctrine, and accused "certain" states of double standards and hypocrisy, in a clear reference to Tehran's Western critics.

He took aim at France, a pivotal player in tightening sanctions on Iran, accusing it of having assisted Israel in developing nuclear weapons decades ago. The Jewish state is widely reputed to have the Middle East's only nuclear arsenal.

France, a big exporter of civilian nuclear technology, built in the 1950s an Israeli reactor in the southern desert town of Dimona, a complex widely believed to have produced atomic bombs.

"While certain countries such as France express concerns over peaceful nuclear activities of Iran ...

"nuclear inspections and curbing its enrichment capacity.Iran denies having a weapons agenda, saying it is enriching uranium solely for peaceful energy purposes.Western states have imposed expanded, more biting sanctions against Iran's energy and banking sectors since the beginning of this year"they have spared no effort in helping Israel ... to develop inhumane nuclear weapons," Akhondzadeh said.

"Indeed, France is the founder of Israel's clandestine nuclear weapons programme," he told a meeting convened to discuss the nuclear Non-Proliferation Treaty (NPT), a voluntary 1970 pact.

IRAN "OPTIMISTIC" ABOUT TALKS

Israel, which is outside the NPT, neither confirms nor denies it has nuclear weapons, under a policy of ambiguity designed to deter regional Arab and Iranian adversaries but avoid arms races.

"The existence of nuclear weapons in the hands of ... Israel continues to pose the gravest threat to the stability and security" in the Middle East, Akhondzadeh said.

The United States and Israel regard Iran's nuclear ambitions as the main threat to peace in the volatile region, prompting persistent speculation they might attack its atomic sites if diplomacy fails to resolve the long-running dispute.

France's representative at the two-week NPT meeting in Vienna said on Monday Iran, one of the world's leading oil exporters, for "far too many years" had pursued an enrichment programme without "any credible civil purpose."

Ambassador Elissa Golberg of Canada, a staunch ally of Israel, told delegates on Wednesday that Iranian activities could "only be understood in the context of a nuclear weapons development effort".

Akhondzadeh said the existence of nearly 23,000 nuclear warheads in the world and their continued modernisation was the "most serious threat to the survival of mankind" and the nuclear weapons states should agree a date to eliminate them.

The five recognised nuclear weapons states are the United States, Russia, China, France and Britain - the same powers which together with Germany are putting pressure on Tehran to scale back its uranium enrichment programme.

Akhondzadeh said Iran was "optimistic" about progress in the negotiations in Baghdad, but it would never give up its right to the peaceful use of atomic energy. Several U.N. Security Council resolutions call on Iran to suspend all enrichment-related work.

The talks with the powers resumed in mid-April in Istanbul after more than a year - a chance to halt a deterioration in diplomacy and help avert the threat of a new Middle East war.

Western governments have credited the escalation of sanctions against Iran's financial institutions as instrumental in forcing Tehran back to the negotiating table.

European diplomats have said an EU oil embargo is a valuable tool and is unlikely to be lifted unless tangible progress is made at the meeting.

"I hope the Baghdad negotiations complete the talks that took place in Istanbul, and the other side should take note that it should use rational behaviour with Iran and (the) country will never surrender to pressure," Fars news agency quoted Haddad Adel as saying.

(Additional reporting by Dan Williams in Jerusalem; Editing by Mark Heinrich)

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