Brazil is halting its attempt to broker a deal over Iran’s nuclear programme – an issue that has brought relations between the Lula da Silva government and the Obama administration to a new low.

Celso Amorim, Brazil’s foreign minister, told the Financial Times the country would no longer seek to settle the nuclear dispute after the US rejected a Turkish-Brazilian deal with Iran to exchange half Tehran’s stockpile of enriched uranium for nuclear fuel for a research reactor.

“We got our fingers burned by doing things that everybody said were helpful and in the end we found that some people could not take ‘yes’ for an answer,” said Mr Amorim in a clear reference to Washington.

“If we are required [to negotiate again], maybe we can still be useful . . . But we are not going out in a proactive way again unless we are required to.”

A senior US administration official welcomed the news that Brasília would no longer place itself in the forefront of negotiations in view of the decision by Brazil and Turkey to vote against United Nations sanctions on Iran this month.

“I don’t see Brazil or Turkey really being in a position to act as a mediator,” he said, arguing that it would be preferable for the established powers that have permanent seats on the UN Security Council to conduct any future talks with Tehran. “Having voted against the sanctions, they are really not neutral.”

The comments by both sides reveal the residual scars left by the clash over Iran.

“We were directly involved in seeking a solution and we were encouraged to do that,” Mr Amorim said. “And then when we produced a result it had no consequence. On the same day that the agreement was produced, before it had even been analysed, the immediate response was the request for a [UN] resolution [on sanctions].”

In an indication that the US and Brazil are trying to overcome their difficulties, Brasília has decided not to proceed with retaliation against the US over subsidies to cotton farmers, despite having received a green light from the World Trade Organisation.

But the two countries remain at odds over each other’s conduct in the Iran dispute.

Brazil argues that its deal with Iran abided by the terms of a detailed letter President Barack Obama sent President Luiz Inácio Lula da Silva in April specifying some of the chief US concerns over a possible fuel exchange agreement.

US officials responded that the deal failed to address other problems Washington had separately conveyed to Brasília.

Brazilian officials have also risked irritating the US and other nations by insisting the country will export ethanol to Iran – even though Brazil’s ethanol industry says it has no such plans.

Ethanol sales are not banned by the UN sanctions but any supplies to Iran’s energy sector would be regarded as breaching the spirit of the UN resolution if not its letter.

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