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EU's Catherine Ashton & Iran's Saeed Jalili1925 GMT: Nuclear Watch Special. Back from a break for a run to find the confirmation by the European Union's Catherine Ashton --- see statement in separate feature --- that there will be a third set of nuclear discussions, in Moscow on 18-19 June, between Iran and the 5+1 Powers (US, Britain, France, Germany, Russia, and China).

There is much more to the statement, however. We will have a special analysis tomorrow, but note for now:

1. Ashton tipped off the large gap between the 5+1 Powers and Iran on approach and proposals. The US and Europe effectively said, "We will only talk easing of sanctions after you give us what we want on your uranium enrichment." Iran said at the same time, "Ease the sanctions and then we will consider giving you what you want."

2. This gap was so wide that the Iranians were on the point of walking away from the talks on Wednesday night. Ashton's emergency session with Iran's Saeed Jalili --- almost two hours --- plus intervention from China and Russia probably averted that breakdown.

3. Moscow as a location for the next talks is a concession to Iran for continuing to talk. So is the date --- the discussions come two weeks before the European Union is scheduled to ban imports of Iranian oil.

4. But Moscow is now "make or break". Either the US and Europe find enough to reverse the 1 July ban on Iranian oil, or the negotiations will break down with Iran's declaration that the West will accept nothing less than its capitulation.

1555 GMT: Nuclear Watch. The latest inside information from Laura Rozen is that the final plenary session has just begun in Baghdad. She indicates that the summit will end in an announcement of a third round of formal meetings, although details are not clear:

There should be a technical level meeting, and diplomats meeting in next couple weeks, diplomat said. Venue unclear.
— Laura Rozen (@lrozen) May 24, 2012

Chinese and Russians been helpful, EU dip said. P5+1 stayed v. United. Iranians not complaining abt EU sanx as much in meetings as in press.
— Laura Rozen (@lrozen) May 24, 2012

1422 GMT: Nuclear Watch. Laura Rozen announces that the delegations will go back to the table at least one more time, passing on news from the European Union's Catherine Ashton:

Ashton spokesman just announced there will be another plenary in an hour. Looks like we are in Baghdad a second night.
— Laura Rozen (@lrozen) May 24, 2012

The meeting follows Ashton's cancellation of a press conference as the Chinese and Russian delegations met with Iran's Saeed Jalili.

1414 GMT: Currency Watch. The Iranian Rial has fallen sharply today, losing more than 5% of its value against the US dollar, reaching 17500:1.

On Wednesday, the Rial was at 16630:1, producing the headline in The Guardian, "Iran's Currency Up Against Dollar Amid Optimism over Baghdad Nuclear Talks" --- misleading because the Rial, amid attempts by the Central Bank to prop it up, had been even stronger a week earlier.

The official rate for the Rial is 12260:1. At its low point during a crisis this winter, the currency fell as low as 21000:1.

1404 GMT: Misery Watch. Grand Ayatollah Makarem Shirazi has asserted that "Western freedom is sinful" and brings "nothing but misery".

1359 GMT: The Battle Within. The Ministry of Intelligence has filed a complaint against Fars for "spreading false news" about Minister of Intelligence Heydar Moslehi.

Fars had claimed last May that President Ahmadinejad criticised Moslehi for failing to control Iran's currency and gold crisis.

1352 GMT: Nuclear Watch. A sign of the improved environment in Baghdad? Fars, which had derided the US-European approach on Wednesday as "outdated", now headlines that the 5+1 Powers have "changed" their line and mentioned the lifting of sanctions.

1332 GMT: Nuclear Watch. A summary of today's manoeuvres at the Baghdad talks....

The morning started as Wednesday night ended, with a bilateral meeting between the European Union's Catherine Ashton, the lead negotiator for the 5+1 Powers (US, Britain, France, Germany, China, and Russia), and Iran's Saeed Jalili. This was followed by a plenary session of all six delegations.

After a break for lunch, the plenary resumed and journalist Laura Rozen, one of the best sources for developments, reports, "Afternoon better than morning."

Rozen writes that Ashton will soon hold a press conference.

1312 GMT: Nuclear Watch. Back after an academic break to find this note from journalist Scott Peterson about the Baghdad talks: "Iranian diplomat says next meeting Geneva 'impossible', and talks atmosphere 'like Baghdad's weather' --- where sandstorm closed airport."

And I see a revelation whose timing is very interesting --- the US Government-funded Radio Farda writes that the Islamic Republic has installed 250 new centrifuges at the Fordoo uranium enrichment plant.

The opening line of the US and European delegations in Baghdad is that Fordoo, revealed in autumn 2010 as a complement to the Natanz enrichment facility, must be closed because it could provide the 20% uranium suitable for further enrichment for a military programme.

The Radio Farda story is based on a Reuters article on Wednesday, fed by two "Western diplomats", that a report of the International Atomic Energy Agency "may have placed in position nearly 350 machines since February --- in addition to the almost 700 centrifuges already operating at the Fordow facility --- but that they were not yet being used to refine uranium".

Reuters' Fredrik Dahl adds the gloss, "[This] is likely to be seen as a sign of continued defiance by the Islamic state of international demands to suspend such activity."

0857 GMT: Political Prisoner Watch. Literary translator Mohammad Soleimani Nia has been released on bail after more than four months in detention.

Earlier this month, Soleimani Nia, who has yet to be charged, agreed to suspend a hunger strike after 28 days.He was in solitary confinement for most of his time in prison.

0848 GMT: Nuclear Watch. More signs of disappointment from the Iranian delegation this morning, with one official declaring to Reuters, "What we heard in Istanbul [in last month's opening talks] was more interesting...We believe the reason P5+1 is not able to reach a result is America. [The 5+1 Powers] came to Baghdad without a clear mandate so we think the atmosphere is difficult."

More dramatic is the warning that the process could be suspended, with an official telling AFP, "It seems that the basis for another round of negotiations doesn't exist yet, unless...the two sides reach an agreement."

0756 GMT: Political Prisoner Watch. Mahmoud Dardkeshan, a commander in the Iran-Iraq War who was close to the late Grand Ayatollah Montazeri, has been summoned to Qom Prison to serve a one-year sentence.

Dardkeshan, who has been arrested 10 times since the 1980s, has also been banned from any public speech, programme, or gathering for seven years for his "propaganda against the system, activities against the state, and publishing lies to disturb public opinion against the authorities".

0745 GMT: Rafsanjani Watch. Former President Hashemi Rafsanjani, speaking at Tehran Azad University, has called for recognition of diverse views in the Islamic Republic: "Even though the Revolution was victorious with the leadership of clergymen and the presence of the people, we should not forget about the role of different political groups. Unity of those different groups made us victorious."

The former President stressed the need to respect the people’s will, staying within the law and avoiding extremes

Rafsanjani also reassserted his recent move on the international front, calling for better links with countries such as the US and Saudi Arabia, saying it was important "to correct our foreign policies in order to develop and move forward".

0520 GMT: We begin with a snap analysis covering Day 1 of the nuclear talks between Iran and the 5+1 Powers (US, UK, France, Germany, China, and Russia) and looking forward to Day 2, "A Way Out of Pessimism?"

Meanwhile, a couple of signs from media coverage....

Even though the headlines in The Washington Post and The New York Times are wildly different ("Nuclear Talks with Iran Show Little Progress" v. "Iran Talks Are Extended as Signs of Common Ground Are Seen"), both are being given the signal by the US delegation that it will be happy with an outcome of another formal set of talks this summer. One official summarised, "It has been a difficult day, but I take that as a good sign. It means we have engaged with each other and discussed difficult issues.”

Meanwhile, the Iranian State media appears to be playing wait-and-see. In contrast to its earlier emphasis on the Islamic Republic's substantive five-point proposal v. the "outdated" offer of the "West", IRNA sticks with a matter-of-fact announcement of Day 2. And Press TV has not filed a story since its own outdated headline last night, "P5+1 Divided on Response to Iran’s Comprehensive Package".