VIENNA (Reuters) - Iran's reluctance to discuss limits to its missile programme in nuclear negotiations with world powers highlights the weapons' strategic importance for a country facing U.S.-backed regional rivals boasting more modern arsenals.
But while it is not at the heart of the talks over Iran's nuclear programme, which centre on the production of fissile material usable in atomic bombs, Tehran's longer-range missiles could become one of several stumbling blocks ahead.
For the United States and its allies, they are a source of concern as they could potentially carry nuclear warheads. Washington wants the issue addressed in the quest for a comprehensive agreement in the decade-old nuclear dispute.
The Islamic Republic denies accusations that it is seeking the capability to make nuclear weapons. It insists that the missiles are part of its conventional armed forces and rules out including them on the agenda for the nuclear discussions.
Iran has one of the biggest missile programmes in the Middle East, regarding such weapons as an important deterrent and retaliatory force against U.S. and other adversaries - primarily Gulf Arabs and Israel - in the region in the event of war.
"Iran will likely refuse to negotiate constraints on its missiles," Michael Elleman, a senior fellow at the International Institute for Strategic Studies (IISS) think-tank, said.
"They represent one of Iran's few capabilities to deter attack, intimidate regional rivals, and boost military morale and national pride."
It was unclear whether the matter would come up during the latest round of negotiations between Iran and the six big powers - the United States, France, Germany, Britain, China and Russia - that got under way in Vienna on Tuesday.
Washington and Tehran earlier this year set out contrasting positions on whether missiles should be raised at all during talks on a long-term solution to Iran's nuclear work that began in February and are supposed to yield an agreement by late July.
Deputy Foreign Minister Abbas Araqchi, a senior member of Tehran's negotiating team, was in February quoted by state media as saying Iran's defence issues were not negotiable and it had no intention of discussing missile capabilities with the powers.
However, a senior U.S. official noted that a U.N. Security Council resolution adopted in 2010 banned all activity by Iran related to ballistic missiles capable of delivering nuclear weapons, and that "in some way, this will have to be addressed".
GULF MILITARY SPENDING RISES
Former senior U.S. State Department official Robert Einhorn, now at the Brookings think-tank, said there was "considerable logic" to tackling the ballistic missile issue in the context of what he called the nuclear weapons threat posed by Iran.
"Given the inaccuracy of early-generation, long-range ballistic missiles, such missiles only have military utility if they carry munitions with a very wide radius of destruction, mainly nuclear weapons," Einhorn said in a new report.
Iran makes no secret of its missile development programme, frequently announcing and televising the testing of new models with the apparent intent to show - for domestic and foreign audiences - its readiness to counter any enemy attacks.
Its efforts to develop and field ballistic missiles have helped drive billions of dollars of U.S. missile defence expenditure, and contributed to Israeli threats of possible pre-emptive military action against Iranian nuclear sites.
Shortly before the start of the nuclear negotiations in February, Iran's military said it had successfully test-fired two new domestically made missiles, including a longer-range ballistic projectile with radar-evading capabilities.
Defence expert Pieter Wezeman of the Stockholm International Peace Research Institute (SIPRI) said it was difficult to assess the missiles' performance due to a lack of reliable information.
He cast doubt on whether Iran had managed to make them accurate enough to turn them into useful conventional weapons to attack military targets, but suggested they could still play an important strategic role.
Ballistic missiles, Wezeman said, can have "major psychological effects on populations and can compel an opponent to tie substantial military assets to efforts to find and destroy" them.
"They are the only long-range weapons (Iran) could deploy against their much better-equipped Arab peninsula neighbours or Israel. The missiles still have a chance to get through, Iran's rather old combat aircraft hardly."
Worried about Iran, Gulf Arab states have increased spending on sophisticated military hardware from the West. In contrast, Iran - although a much bigger country of some 70 million people - is largely shut out from arms markets due to sanctions.
LEGITIMATE DEFENCE NEEDS?
Elleman said Iran's Shahab-3 missile, or a modified version called Ghadr-1, would be the prime delivery vehicles for a nuclear warhead, while the longer-range Sajjil-2 programme appeared frozen, perhaps because of technical problems.
Those three missiles are believed to have ranges of up to 1,000 km, 1,600 km and 2,400 km respectively - putting Israel and potentially parts of Europe within reach - although their reach might be less if they were to carry nuclear warheads.
Elleman said there were challenges in building a nuclear-armed missile - including making the bomb small and light enough to fit into the cone - "but all of these tasks are likely within Iran's capabilities".
The U.S. Director of National Intelligence, James Clapper, told a Senate briefing earlier this year he believed Iran would choose a ballistic missile as its preferred method of dispatching nuclear bombs, if it ever built such weapons.
"Iran's ballistic missiles are inherently capable of delivering WMD (weapons of mass destruction)," he said.
Missile expert Markus Schiller said Iran would "definitely" not be able to win a nuclear war against a nuclear-armed state or its allies. But, "assuming they are risk takers, assuming that they have a nuclear device, a functional detonator, and a good idea of thermal protection systems for re-entry, they have everything they need for a primitive nuclear warhead," he said.
Jofi Joseph, a former director for non-proliferation on the White House National Security Council staff, said Iran had legitimate defence needs which ballistic missiles armed with conventional warheads could help address.
"It is challenging to formulate any restrictions on Iran's ballistic missile programme that can help prevent its use as a delivery mechanism for nuclear weapons, but preserve its capability to deliver conventional warheads," he said.
Einhorn said one way out of the "potential impasse" may be to exclude the issue from any comprehensive nuclear agreement and work out a separate understanding regarding missiles.
"As a confidence-building measure, Iran might indicate that it will refrain from certain missile-related activities for a certain period of time," he suggested.
(Editing by Mark Heinrich)