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(Bloomberg) -- The slow pace of negotiations on Iran’s nuclear activities is raising the risk that a new round of sanctions against the Islamic Republic could end diplomatic efforts to peacefully resolve the dispute.

While world powers and Iran concluded a “serious and useful” meeting late yesterday in Geneva, they still haven’t found a solution to end their 12-year-old deadlock, the European Union said today in an e-mail. Iranian officials will meet their Chinese, French, German, Russian, U.K. and U.S. counterparts again next month, the EU said without providing a date or location.

Just three days after President Barack Obama and U.K. Prime Minister David Cameron warned against imposing fresh sanctions on Iran, U.S. senators circulated draft legislation that could torpedo talks. The 37-page bipartisan bill, released during the Geneva round of talks, would impose new penalties and limit the extent to which U.S. negotiators can seek compromise with Iran, home to the world’s No. 4 oil reserves.

“Failing to reach a conclusion by now was itself a high risk strategy that looks increasingly vulnerable to impatient legislators,” said Paul Ingram, executive director of the London-based British-American Security Information Council, a government-sponsored advisory group. “The belief somehow that a little more time and patience will bring results is also hard to fathom. Now is a crucial moment.”

Kerry, Zarif

Political directors from world powers and Iran met yesterday in Geneva. The five-day round of talks was kicked off by a meeting between U.S. Secretary of State John Kerry and his Iranian counterpart, Mohammad Javad Zarif, in the Swiss city.

The U.S. Senate legislation, co-authored by Illinois Republican Mark Kirk and New Jersey Democrat Robert Menendez, threatens not only new sanctions but casts doubt on compromise measures under discussion at the talks.

Any agreement should “reverse the development” of Iran’s uranium-enrichment program, reads the proposed legislation, which also prescribes escalating sanctions against the country’s oil sector if a final deal isn’t agreed by July 1. Congress has the ability to muster veto-proof support for the bill, according to a Senate aide who asked not to be named in return for discussing the legislation before it’s introduced.

“Even if new sanctions fail to pass, premature congressional activism risks diverting the U.S. negotiators’ focus from negotiating with Iran to negotiating with congress,” International Crisis Group analyst Ali Vaez said in an interview in Geneva, where he attended the talks. Diplomats “are making progress but at a snail’s pace.”

Iranian Centrifuges

While Iran has said it isn’t willing to dismantle any of the 9,000 centrifuges it is currently feeding with uranium, the country has explored putting caps on future capacity. For that compromise to occur, the Islamic Republic has sought guarantees that United Nations Security Council and U.S. Congressional sanctions are removed.

Some members of Iran’s parliament have threatened retaliation if the Senate pursues additional sanctions. The country could revive its own bill authorizing its atomic agency to produce highly-enriched uranium to 60 percent purity, said Mohammad Hassan Asfari, a member of parliament’s national security and foreign policy committee, on Saturday in Tehran.

“If there is progress, it is a very slow one and there are no guarantees that this progress will transform into a decisive shift,” Russian Deputy Foreign Minister Sergei Ryabkov said following the Geneva talks, according to Ria Novosti. “Major disagreements remain on the majority of disputed issues.”

To contact the reporter on this story: Jonathan Tirone in Geneva, Switzerland at jtirone@bloomberg.net To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Leon Mangasarian, Mark Williams

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