By Louis Charbonneau, John Irish and Parisa Hafezi
LAUSANNE, Switzerland (Reuters) - Iran and six world powers tried to break an impasse in nuclear negotiations on Sunday, but officials cautioned that attempts to reach a preliminary deal by a deadline in two days could yet fall apart.
The two sides explored compromises in areas including numbers of centrifuges used to enrich uranium that Iran could operate, and its nuclear enrichment work for medical research.
But Israel, which feels especially threatened by the possibility of a nuclear-armed Iran, said details of a possible framework agreement emerging from the talks in Lausanne, Switzerland, were even worse than it feared.
Foreign ministers from the six countries will hold the first full meeting with Iran's foreign minister on Monday morning.
The United States, Britain, France, Germany, Russia and China want at least a 10-year suspension of Iran's most sensitive nuclear work. Tehran, which denies it is trying to develop a nuclear weapons capability, is demanding an end to international sanctions that are crippling its economy.
German Foreign Minister Frank-Walter Steinmeier said there had been "some progress and some setbacks in the last hours".
"I can't rule out that there will be further crises in these negotiations," he told reporters in Lausanne.
Officials warned that deep disagreements remained on several points but said the two sides had been closing in on a preliminary deal that could be summarized in a brief document which may or may not be released.
Several officials told Reuters that Tehran had indicated a willingness to cut the number of centrifuges it uses to fewer than 6,000, thereby slowing its program, and to send most of its enriched uranium stockpiles for storage in Russia.
Senior Iranian negotiator Abbas Araqchi told reporters dispatching stockpiles abroad "was not on Iran's agenda".
Western powers were meanwhile considering allowing Iran to conduct limited and closely monitored enrichment-related work for medical purposes at an underground facility, the officials added on condition of anonymity.
Iran had originally insisted on keeping in operation all the nearly 10,000 centrifuges it currently uses, but said in November that Washington had indicated it could accept around 6,000. Iranian officials say they have been pushing for 6,500-7,000.
All parts of an emerging nuclear deal are interrelated. "Everything could still fall apart" before Tuesday's self-imposed deadline for a framework agreement, a Western official told Reuters.
Araqchi said he believed a deal was possible but that serious decisions remained to be taken.
One concerns Iran's demand to continue with research into a new generation of advanced centrifuges that can purify uranium faster and in greater quantities for use in nuclear power plants or, if very highly enriched, in weapons.
Another question is over the speed of removing United Nations sanctions on Iran. A senior U.S. official said there were other unresolved questions but expected those would fall into place if the big sticking points could be worked out.
The U.S. official said negotiators were working towards something that would be called an "understanding" rather than a formal agreement, which would form the basis of a comprehensive deal, including all technical details, to be tied up by June 30.
ISRAEL FURIOUS
A senior European diplomat said ministers were engaged in a "a political push to convince Iran" before Tuesday's deadline, adding: "All the pieces of a possible accord are there. We have to try and put them in place so that everything adds up."
The powers' aim is to ensure that for the next decade Iran is kept at least one year away from being able to produce enough fissile nuclear material for a single weapon.
"It has to be a deal which puts the bomb beyond Iran's reach. There can't be any compromise about that," British Foreign Secretary Philip Hammond said.
"If we're going to get this done here ... Iran has got to take a deep breath and take some tough decisions."
His remarks contrasted with hostility from Israel, which is believed to have the Middle East's only nuclear arsenal but is not a party to the talks.
"This deal, as it appears to be emerging, bears out all of our fears, and even more than that," Prime Minister Benjamin Netanyahu told his cabinet in Jerusalem.
Referring to advances made by Houthi rebels allied to Tehran in Yemen, he accused the Islamic republic of trying to "conquer the entire Middle East".
"The Iran-Lausanne-Yemen axis is very dangerous to humanity, and must be stopped," Netanyahu said.
Israel has previously threatened to attack Iran if it is unhappy with an eventual deal.
Ahead of the six n Kerry have all canceled travel plans so they could remain in Lausanne to continue the talks at a ministerial level. If there is a deal, the talks may shift to Geneva for the announcement.
Their Russian and British counterparts are expected in Lausanne soon.