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(Refiles to clarify in first paragraph talks due this week)

* Western powers see staggered approach as more promising

* Israel won’t seek mutual deterrence with nuclear Iran

By Dan Williams

JERUSALEM, April 8 (Reuters) – Israel has signalled it would

accept, as a first priority, world powers focusing on persuading

Iran to stop higher-level uranium enrichment when they resume

stalled nuclear negotiations this week with Tehran.

Israel, which has threatened last-resort attacks on its

arch-foe’s nuclear facilities if diplomacy fails, demanded last

month that any negotiated resolution should end all uranium

enrichment, high and low level, and remove all fuel already

stockpiled by Iran.

But Western diplomats have said the six powers – the United

States, Britain, France, Russia, China and Germany – that are

due to open new talks with Iran on Friday would first tackle its

uranium refinement to a fissile concentration of 20 percent

rather than its more abundant 3.5 percent-pure fuel. The two

sides have not yet agreed where the talks will take

place.

The 20 percent enriched uranium would be far easier to

enrich to bomb-grade 90 percent purity, though Iran denies

having such designs, saying it is only seeking electrical energy

and medical isotopes.

“We told our American friends, as well as the Europeans,

that we would have expected the threshold for successful

negotiations to be clear, namely that the P5+1 will demand

clearly that – no more enrichment to 20 percent,” Barak said in

an interview with CNN’s Fareed Zakaria GPS to be aired on

Sunday.

Iran’s stocks of 20 percent-pure uranium should be removed

“to a neighbouring, trusted country”, Barak said, according to

an advance transcript of the interview.

Iran says it has a sovereign right to peaceful nuclear

technology and has repeatedly rejected U.N. resolutions calling

for a suspension of all uranium enrichment.

But it has at times appeared more flexible regarding 20

percent enrichment, which it began in early 2010, and some

experts say that initially getting Iran to stop this

higher-grade work could open a way to ease the deadlock.

Asked about Barak’s comments to CNN, another Israeli

official confirmed that the Netanyahu government was focusing

lobbying efforts on Iran’s 20-percent pure uranium but said the

long-term goal remained the ending all of its enrichment work.

“The understanding that has emerged in our contacts with the

powers is that there should be a staggered approach,” the

official told Reuters on condition of anonymity.

COUNTDOWN ON ISRAELI DECISION

Western diplomats have similarly stressed that an initial

focus on 20 percent enrichment should not be seen as

“legitimising” lower-level work as the U.N. Security Council has

demanded a full suspension.

Iran has enough 3.5 and 20 percent-enriched uranium for

around four bombs if refined further, Western experts say.

Barak’s remarks dovetailed with what the New York Times said

on Saturday would be submitted to Iran by the United States and

other Western nations in the upcoming talks.

According to the report, the world powers, which have ramped

up sanctions against Iran, also plan to press it to close and

ultimately dismantle a recently completed enrichment bunker in a

mountain near Qom – another demand levelled by the Israelis.

Israel’s Yedioth Ahronoth newspaper said Prime Minister

Benjamin Netanyahu presented U.S. President Barack Obama last

month with propositions for an Iran deal that included allowing

limited operations at its main enrichment facility at Natanz.

Netanyahu’s office had no comment on the Yedioth report.

Many analysts believe it may be unrealistic to demand that

Iran suspend all enrichment as its leaders have invested so much

national and personal prestige in the project.

In return for allowing limited, low-level enrichment, those

analysts argue, Iran would need to accept much more intrusive

U.N. inspections to make sure there is no military diversion.

Widely assumed to have the Middle East’s only atomic

arsenal, Israel considers a nuclear-armed Iran would be a mortal

threat.

“We don’t have to make a decision next week, and we cannot

wait years, though,” Barak said in the CNN interview when asked

about the prospect of an Israeli pre-emptive attack. “We don’t

have any decision about what to do or a date for (a) decision.”

He dismissed speculation that Israel might settle for a Cold

War-style nuclear deterrence with the Iranians if they get the

bomb.

“No mutually assured destruction kind of situation … will

serve as a modifier or stabiliser in this case, because we are

not continents, and Israel is not either the United States or

the Soviet Union,” Barak said.

(Writing by Dan Williams; Editing by Will Waterman)