By Parisa Hafezi and Maher Chmaytelli
DUBAI (Reuters) -The United States on Sunday denied a report by Iran's state television that the arch-foes had reached a prisoner swap deal in exchange for the release of $7 billion frozen Iranian oil funds under U.S. sanctions in other countries.
Iranian state television said on Sunday that Tehran would free four Americans accused of spying in exchange for four Iranians held in the United States and the release of the frozen Iranian funds.
The U.S. government denied that an agreement has been reached.
The state TV, quoting an unidentified Iranian official, also said British-Iranian national Nazanin Zaghari-Ratcliffe would be released once Britain had paid off a debt on military equipment owed to Tehran.
A British Foreign Office official played down that report.
Iran and world powers are holding talks to revive the 2015 nuclear accord that Washington abandoned three years ago and reimposed sanctions on Tehran.
Iranian officials told Reuters last month that an interim deal could be a way to gain time for a lasting settlement that involved unfreezing Iranian funds blocked under U.S. sanctions.
"Informed source says Biden administration has agreed to release four Iranian prisoners jailed for bypassing U.S. sanctions in exchange for four American 'spies'," the Iranian state TV report said on Sunday.
"Release of Nazanin Zaghari in exchange for UK's payment of its 400 million pound debt to Iran has also been finalized. The source also said the Biden administration has agreed to pay Iran $7 billion," it said.
In Washington, State Department spokesman Ned Price said, "Reports that a prisoner swap deal has been reached are not true."
Ron Klain, White House chief of staff, also denied the report. "Unfortunately, that report is untrue. There is no agreement to release these four Americans," Klain said on CBS "Face the Nation."
U.S. officials regularly raise the issue of detained Americans with Iran, Klain said.
Tehran and the powers have been meeting in Vienna since early April to work on steps that must be taken, touching on U.S. sanctions and Iran's alleged breaches of the 2015 deal, to bring Tehran and Washington back into full compliance with the accord.
Iran says $20 billion of its oil revenue has been frozen in countries like South Korea, Iraq and China under the U.S. sanctions since 2018.
U.S. national security adviser Jake Sullivan said on Sunday no deal had been reached with Iran in Vienna.
"There is still a fair distance to travel to close the remaining gaps," he said on ABC's "This Week" program. "And those gaps are over what sanctions the United States and other countries will roll back. They are over what nuclear restrictions Iran will accept on its program to ensure that they can never get a nuclear weapon."
ZAGHARI-RATCLIFFE
On the Zaghari-Ratcliffe case, British foreign minister Dominic Raab told Times Radio earlier, "We recognise the IMS debt should be repaid and we're looking at arrangements for securing that."
A Foreign Office official later played down the speculation on her release.
Zaghari-Ratcliffe, a project manager with the Thomson Reuters (NYSE:TRI) Foundation charity, was freed from house arrest in March at the end of a sentence for seeking to overthrow Iran's government.
An Iranian court sentenced her last month to another year in jail, weeks after she finished the prior five-year sentence, a decision Britain called inhumane.
She was arrested at Tehran airport in April 2016 and later convicted of plotting to overthrow the clerical establishment.
Her family and the foundation, a charity that operates independently of media firm Thomson Reuters and its news subsidiary Reuters, deny all charges against her and say she was only visiting relatives in Iran.