President Trump expected to exit Iran deal, Europeans say; Tehran defiant

WASHINGTON/PARIS (Reuters) - U.S. President Donald Trump is expected to announce on Tuesday that he is pulling out of the Iran nuclear deal, European officials said, after they struggled to persuade him that the accord has halted Iran's nuclear ambitions.

One senior European official closely involved in Iran diplomacy said U.S. officials had indicated late on Monday that Trump would withdraw from the agreement, but it remained unclear on what terms and whether sanctions would be reimposed.

European officials believe Trump may not renew sanctions waivers, a move which would in effect end U.S. participation in the deal. Britain is deeply pessimistic about Trump's announcement, a senior British diplomat said.

A senior Western diplomat said France, Britain and Germany - also party to the accord - were working on the assumption of a hard U.S. exit after a call last week between U.S. Secretary of State Mike Pompeo and European officials at which he made clear talks on rescuing the deal would not go further.

"He let it be known that it was over," the diplomat said.

RELATED: US-Iran relations throughout time

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United States and Iran Relations throughout time
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United States and Iran Relations throughout time
Return of the hostages from Iran as they step off the plane in Germany. Barry Rosen is second from the bottom waving with no glasses and a beard. He has just announced that he will be going back to Iran to meet with his captors. The hostages were kept over a year in captivity after the US Embassy was stormed during the Iranian Revolution. Relations with Iran and the US have been improving lately. (photo by Tim Chapman)
A Kurdish family having fled northern Iraq, carry all their worldly possessions, reach the border town of Nossod, Iran. Saddam Hussein crushed the Kurdish uprising in northern Iraq in the aftermath of 1991 Gulf War led by the US and allied forces. (Photo by Kaveh Kazemi/Getty Images)
An Iranian woman pets a dove caged in the belly of a replica of the Statue of Liberty at the former US embassy compound November 3, 2001 in Tehran, Iran. Iranian authorities opened the former embassy to the public for the first time since the 1979 Islamic revolution toppled the US-backed Shah which ultimately led to the breaking of relations between Washington and Tehran. (Photo by Keivan/Getty Images)
Reza Pahlavi, son of the late Shah of Iran Mohammad Reza Shah Pahlavi, speaks to New York University students December 4, 2001 in New York City. Pahlavi spoke of the need to root out terrorism and the need for democracy in Iran. (Photo by Mario Tama/Getty Images)
An Iranian man teaches his son the 'death to America' chant during a demonstration after Friday prayers April 5, 2002 in Tehran. The protesters opposed the Israeli incursion into Palestinian-controlled territories. (Photo by Keivan/Getty Images)
Deputy Secretary of State Richard Armitage greets people before giving testimony before the U.S. Senate Foreign Relations Committee on Capitol Hill October 28, 2003 in Washington DC. The Committee is hearing testimony on security threats and the U.S. policy toward Iran. (Photo by Mark Wilson/Getty Images)
An Iranian girl rests during a meeting of the conservative group, the Coalition of Builders of Islamic Iran, in Tehran February 16, 2004. The group has taken a tough stance on the country's nuclear prerogatives and a moderate line on US-Iranian relations and the imposition of Islamic social regulations. The main reformist parties are staying away after a conservative-run political vetting body, the Guardians Council, barred some 2,300 people -- most of them reformists -- from even standing in the February 20 polls. (Photo credit: BEHROUZ MEHRI/AFP/Getty Images)
A man holds an effigy of U.S. President George W. Bush during a protest against the U.S.-led occupation of Iraq in Enqelab Square May 19, 2004 in Tehran, Iran. Demonstrators reportedly hurled petrol bombs, firecrackers and stones at the British embassy. (Photo by Majid/Getty Images)
This 18 January file photo shows Secretary of State-designate Condoleezza Rice testifying before the Senate Foreign Relations Committee during her confirmation hearing on Capitol Hill in Washington, DC. US Secretary of State Condoleezza Rice will discuss the war in Iraq and tensions with Iran when she meets Chancellor Gerhard Schroeder on 04 February 2005.(Photo credit: TIM SLOAN/AFP/Getty Images)
U.S. Senator Dick Lugar (R-IN) (C) speaks to the media after addressing the U.N. Security Council at the United Nations February 6, 2006 in New York City. Lugar, along with other Senate Foreign Relations Committee members George Voinovich (R-OH) (R) and Norm Coleman (R-MN), spoke on reform at the U.N., Iran and energy conservation. (Photo by Spencer Platt/Getty Images)
Iranian Foreign Minister Manouchehr Mottaki speaks during a meeting with relatives of the seven Iranian detainees arrested in Iraq by US forces, in Tehran, 18 May 2007. US troops seized seven Iranians in the northern Iraqi city of Arbil on 11 January from what Iran claims was an official consular building. Mottaki said after meeting the families of the detainees that Iran maintains that they were diplomats working for a 'consulate'. (Photo credit: ATTA KENARE/AFP/Getty Images)
Iranian students walk past an anti-US mural on the wall of the former US embassy in Tehran 24 October 2007. Twenty-eight years ago, 19-year-old Iranian chemistry student Massoumeh Ebtekar agreed to join other students in holding more than 60 Americans captive at their embassy in Tehran, an event that was to last 444 days and leave a rupture in US-Iranian relations that has yet to be healed. For Ebtekar, who was elected last year as a member of Tehran city council, there is no contradiction between her prominent role in the embassy siege and her efforts today for greater moderation in the Islamic republic. (Photo credit: ATTA KENARE/AFP/Getty Images)
A US soldier carries on March 1, 2008 a platter of mutton and rice offered to the troops by the mayor of the village of Nafet Khana on the Iraq-Iran border, which was destroyed during the 1980-88 Iraq-Iran war. An Iranian delegation left Baghdad for home today without holding talks with officials from archfoe the United States on the security situation in Iraq, an Iranian official said. Iran and the United States, which have had no diplomatic relations since 1980, held three rounds of talks about Iraq last year, but a fourth round scheduled for last month was postponed. AFP PHOTO/PATRICK BAZ (Photo credit should read PATRICK BAZ/AFP/Getty Images)
WASHINGTON, DC - July 09: Undersecretary of State William Burns testifies during the Senate Foreign Relations hearing on Iran. On the same day Iran test-fired missiles in a show of force in the Persian Gulf, the Bush administration Wednesday sought to downplay the country???s power and influence. ???For its part, Tehran seems to relish heightening concerns by promoting the illusion that Iran is on the ascendance,??? Undersecretary of State William Burns said in prepared testimony. ???However, Iran is not 10 feet tall, nor is it even the dominant regional actor.' (Photo by Scott J. Ferrell/Congressional Quarterly/Getty Images)
Japanese Akiko Saberi, mother of US-Iranian journalist Roxana Saberi, holds press cards and ID's for her jailed daughter at the family's house in Tehran on April 18, 2009. An Iranian revolutionary court has sentenced Roxana Saberi, 31, to eight years in jail on charges of spying for the United States, her lawyer said. AFP PHOTO/ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)
Iranian nuclear scientist Shahram Amiri stands with his father upon arrival at Imam Khomeini Airport in Tehran on July 15, 2010. Amiri, who claimed he was 'abducted' by US spies last year, denied that he was a nuclear scientist, but said he was questioned by Israelis during his 'harsh' captivity. Amiri had gone missing from Saudi Arabia in June 2009 while on a pilgrimage and surfaced in Iran's Interests Section in Washington on July 13, 2010. Upon his arrival in Tehran he immediately told reporters that he was just a 'simple researcher'. Iranian officials claim he was kidnapped by the Central Intelligence Agency of the United States. US officials have denied these accusations. AFP PHOTO / ATTA KENARE (Photo credit should read ATTA KENARE/AFP/Getty Images)
NEW YORK - JULY 30: (L to R) Laura Fattal, Cindy Hickey and Nora Shourd, mothers of three U.S. Citizens being detained in Iran, hold photos during a protest outside the Iranian mission to the United Nations on July, 30, 2010 in New York City. Josh Fattal, Shane Bauer, and Sarah Shourd, have been held by Irainian authorities since July 31, 2009 after they were detained along the Iraq and Iran border and accused of spying. (Photo by David Goldman/Getty Images)
NEW YORK, NY - SEPTEMBER 25: Josh Fattal (C) and Shane Bauer (R), two American hikers released after spending more than two years imprisoned in Iran, were joined by Sarah Shourd (L) and family members in front of a press-filled conference room at the Parker Meridien New York on September 25, 2011 in New York City. Fattal, Bauer, and Shourd were charged with trespassing and espionage, after allegedly crossing the border between Iraq and Iran on a hiking trip. (Photo by Michael Nagle/Getty Images)
Senator John McCain, a Republican from Arizona, right, and U.S. Secretary of State Hillary Clinton talk during a Senate Foreign Relations Committee nomination hearing in Washington, D.C., U.S., on Thursday, Jan. 24, 2013. Senator John Kerry stressed the need to prevent Iran from acquiring nuclear weapons. He described the 'immediate, dangerous challenges' facing the nation as he seeks confirmation to become secretary of state. Photographer: Andrew Harrer/Bloomberg via Getty Images
WASHINGTON, DC - JULY 22: Ali Rezaian looks at a picture of his brother, Washington Post Tehran bureau chief Jason Rezaian, after a news conference at the National Press Club July 22, 2015 in Washington, DC. The news conference was to give an update on the case of Jason Rezaian, who is being held in Evin Prison in Iran since July 22, 2014. (Photo by Alex Wong/Getty Images)
Sarah Hekmati(R), sister of US Marine Corps veteran Amir Hekmati, speaks about her brother May 19, 2014 during a vigil held for him in Lafayette Park across from the White House in Washington, DC. The vigil was held on the 1,000th day of Amir's imprisonment in Iran. Amir is an Iranian-American detained in Iran while visiting his grandmother. Falsely accused of being a spy, he was detained in August of 2011, held in solitary confinement for months and hidden by the walls of Irans Evin prison. He was sentenced to death in January of 2012, the first American to receive the death penalty in Iran in over 33 years. AFP PHOTO / Karen BLEIER (Photo credit should read KAREN BLEIER/AFP/Getty Images)
Committee chairman Senator Bob Corker(L) , R-TN, and ranking member Senator Benjamin L. Cardin , D-MD, shake hands before a meeting of the Senate Foreign Relations Committee on Capitol Hill April 14, 2015 in Washington, DC. The committee met to debate and vote on S.615, the Iran Nuclear Agreement Review Act of 2015. AFP PHOTO/BRENDAN SMIALOWSKI (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
UNITED STATES - JULY 23: Sen. Marco Rubio, R-Fla., takes his seat for the Senate Foreign Relations Committee hearing on the Iran Nuclear Agreement on Thursday, July 23, 2015. Secretary of State John Kerry, Energy Secretary Ernest Moniz, and Treasury Secretary Jack Lew testified. (Photo By Bill Clark/CQ Roll Call)
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Such a move could ratchet up tensions in a region riven with interrelated wars, including the multi-layered conflict in Syria, where Iran's presence has brought it into conflict with Israel.

Word of Trump's apparent choice coincided with a spate of defiant Iranian statements asserting the deal's demise would not harm its economy, and Tehran did not fear U.S. military attack.

"Our enemies including America, the Zionist regime (Israel) and (their) allies in the region should know Iran has prepared for the worst scenarios and threats," Revolutionary Guard deputy commander Hossein Salami said.

Trump planned to discuss his decision in a phone call on Tuesday with French President Emmanuel Macron, a senior White House official said.

Trump has consistently threatened to pull out of the 2015 agreement because it does not addressIran's ballistic missile program or its role in wars in Syria and Yemen, and does not permanently prevent Tehran from developing nuclear weapons.

European leaders have warned a U.S. withdrawal would undo years of work that has kept nuclear arms out of Iran's hands.

In Washington, Ed Royce, the Republican chairman of the U.S. House of Representatives Foreign Affairs Committee said the United States should continue to fix flaws in accord and "enforce the hell" out of it, but not withdraw.

"NEGATIVE DECISION"

Several European officials stressed they had no concrete information and Trump could still change his mind when he makes the announcement at 2 p.m. (1800 GMT).

White House legislative director Marc Short told reporters that Trump planned to make calls to lawmakers ahead of his afternoon announcement.

"He wants to see Iran not only end its nuclear program but also become ...  a nation that is not funding terrorism, not attacking Israel, not looking to continue to attack allies that we have," he said.

The Republican leader of the U.S. House Armed Services Committee, Mac Thornberry, said he assumed Trump would withdraw from at least part of the deal. Thornberry said that while he didn't like the agreement, he favored staying with it because of the insight it gave into Iran's weapons activities.

"We don't have enough (insight) but it gives us more than we would have otherwise," he told Fox News.

Iran's Armed Forces Chief Major General Mohammad Bagheri said Iran's military power would defuse any threat to Tehran. Israeli Prime Minister Benjamin Netanyahu accused Iran of deploying "very dangerous weapons" in Syria to threaten Israel.

A decision to quit the deal could also rattle oil markets due to Iran's role as a major exporter, and critics say it could also harm Trump's efforts to reach a nuclear deal with North Korea, a prospect he has dismissed.

While Iran suggested its economy would not be hurt whatever happened, its rial was near record lows against the dollar in the free market as Iranians tried to buy hard currency, fearing financial turmoil if Trump quits the deal.

'STAND ON OUR OWN FEET'

"One man in one country might create some problems for us for a few months, but we will overcome those problems," President Hassan Rouhani said. "If we are under sanctions or not, we should stand on our own feet."

Even before the latest standoff, a raft of business deals including plane purchases have been delayed amid bankers' concerns that the nuclear accord could unravel or that they could fall foul of U.S. financial controls.

Whatever Trump's decision, those concerns are unlikely to ease any time soon as the fallout from weeks of uncertainty and the appointment of a more hawkish U.S. foreign policy team expose underlying obstacles, bankers said.

The deal, negotiated during the administration of Trump's Democratic predecessor Barack Obama, eased economic sanctions on Iran in exchange for Tehran limiting its nuclear program.

Trump has called it the "worst deal ever negotiated" and he wants Britain, France and Germany to toughen up the terms.

Under the formally titled Joint Comprehensive Plan of Action (JCPOA), the United States committed to ease a series of U.S. sanctions on Iran and it has done so under "waivers" that effectively suspend them.

WAIVERS

International Atomic Energy Agency chief Yukiya Amano has said the world's most robust nuclear verification regime was in Iran. If the deal failed it would be a great loss.

A senior Iranian official said Iran would not accept any demands on top of those it agreed in the deal, and Trump would be responsible for all the consequences of the deal's collapse.

The Kremlin said on Tuesday a U.S. withdrawal from the nuclear deal would have harmful consequences.

Israel is widely believed to be the only nuclear-armed state in the Middle East, although it neither confirms nor denies possessing atomic weapons.

Financial markets are watching Trump's decision closely. On Tuesday, oil retreated from 3-1/2 year highs as investors waited for Trump's statement.

(Additional reporting by Arshad Mohammed in Washington, Sybille de La Hamaide, John Irish and Tim Hepher in Paris, Parisa Hafezi in Ankara, Bozorgmehr Sharafedin in London, Andrew Torchia in Dubai, Writing by William Maclean; Editing by Janet Lawrence, Angus MacSwan and Peter Graff)

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