American and British financial and legal experts arrived here today and immediately joined intensive talks between U.S. and Algerian officials trying to complete a deal for the release of the 52 U.S. hostages in Iran.
The arrival of the experts to reinforce a U.S. negotiating team led by Deputy Secretary of State Warren Christopher touched off intense speculation that the end of the hostages' 14-month ordeal was at hand. But by tonight Algerian time, no final break-through in the U.S.-Iranian dispute had yet been announced.
In Tehran, chief Iranian hostage negotiator Behzad Nabavi said, "From the point of view of the Islamic Republic of Iran, there is no obstacle in resolving the issue." In an interview with Iran's official Pars News Agency, he added, "The government . . . has announced its willingness to end the issue, and we condemn any further waste of time."
Apparently referring to the last American offer to Iran relayed earlier in the week via the Algerian intermediaries, Nabavi said that "the Algerian statement has already been agreed upon by both sides."
The dispatch of the team from London indicated the assumption by Britain of a central role in the final dealings for release of the hostages, now in their 440th day of captivity. tonight that the Bank of England has opened an account in the name of the Algerian government to receive formerly frozen Iranian assets from European and U.S. banks for transfer to Iran.
The British Broadcasting Corp. also reported that the Bank of England has agreed to transfer $980 million worth of its gold to Iran in the name of the U.S. government, which is to replace the British gold with Iranian stocks from the United States.
In Algiers, the team of U.S. and British experts from London was driven straight from Algiers airport to meet with Christopher and his aides for about two hours before being driven to the Algerian Foreign Ministry. They stayed there for four hours working in subgroups with the Algerians, a U.S. Embassy spokesman said. He said the five Americans, who arrived with two secretaries, had already been working in London on financial aspects of the hostage deal for several days.
The team led by State Department deputy legal adviser William Lake, included several U.S. bankers and at least two Britons: Bank of England Deputy Governor Christopher McMahon and Chief Cashier David Somerset. Somerset, whose signature appears on British pound notes, is a cousin of Queen Elizabeth II.
Before the new group's arival, Christopher went to see Algerian Foreign Minister Mohammed Benyahia for about 75 minutes this morning. The Algerian news agency said the meeting was held at Christopher's request, which seemed to indicate that it involved a message from or concern expressed by Washington. Christopher did not accompany the new group to the ministry in the afternoon.
At 10:30 p.m. local time, however, Christopher made another trip to the Foreign Ministry, returning to the U.S. Embassy about midnight. Embassy sources would give no details on the purpose of Christopher's late night visit.
Normally communicative U.S. officials insisted that all comment about today's events in Algiers would have to come from Washington. Algerian spolesmen were unavailable since it was Friday, the Moslem Sabbath.
Since the Algerian Central Bank was closed for the day, it appeared that special arrangements would have been required for any transfer of funds here today. The Algerian authorities appear to have been going out of their way to help speed up the process of arranging and implementing an agreement between Washington and Tehran.
Except for a desire to expedite things as much as possible, there was no immediate explanation of why the new group of experts had to come here from London. U.S. Embassy staffers said they had expected them for 12 hours before their actal arrival. Embassy Minister Christopher Ross told reporters only that "there has been an Iranian proposal which requires their attention." o
According to financial sources, the presence of the British was regarded as essential for the smooth handover of frozen Iranian assets held by U.S. banks in Britain. They said this was because British law is different from American banking legislation and that U.S. banks reportedly were concerned that they would not have the same measure of protection in pursuing claims against Iran in Britain as in the United States.
There was also speculation here that Christopher might have sent his plane to London to pick up the experts as a way of dramatizing to Iran and to international opinion U.S. determination to try to conclude the arrangements quickly.
In his remarks to the Pars News Agency in Tehran, hostage negotiator Nabavi appeared to back away from an earlier interview in which he seemed to threaten breaking off negotiations unless Washington began transferring frozen Iranian assets to Algeria by "the end of working hours" today.
In his earlier interview, Nabavi told Pars thast "conditions will change dramatically" if Washington fails to take "a really practical step in connection with the transfer of Iran's agreeed deposits." The statement initially confused Western diplomats in Tehran.
After studying it, however, most thought Nabavi was just trying to speed up the process to end the hostage dispute without having to deal with President-elect Ronald Reagan, Reuter reported from the Iranian capital.
In Vienna, meanwhile, Austrian Chancellor Bruno Kreisky said his government and the Austrian Central Bank were willing to give "technical assistance" in the transfer of frozen Iranian assets from the United States, the Associated Press reported. Another official said the Iranian government had asked for such help last week, but that no other contacts were made. He said Iran apparently had contacted a number of other countries to have greater technical leeway in their negotiations.
Washington Post special correspondent James Lemoyne reported from London:
A Bank of England spokesman said: "The Bank of England is represented at the invitation of the American and Algerian authorities to try to play a constructive part in the financial regotiations."
The brief statement failed to dispel confusion over the exact amount of money that will be deposited in the Algerian government's account in the Bank of England. The BBC reported tonight that U.S. banks would transfer $1.2 billion to the account.
But in a later report British Independent Television News said that U.S. banks would deposit $2.6 billion in the Algerian account, European banks would deposit a further $1.2 billion and that Iran would agree to repay $1 billion in outstanding loans. It said the $2.6 billion from U.S. banks would include any gold bullion transfer.
Both British television networks reported the following scenario for an eventual transfer of funds to Iran: When all funds are assembled at the Bank of England, the bank would telex the Algerian government, which would then telex Iran. Iran would put the hostages on a plane, and when the plane left Iranian air space, Algeria would telex the Bank of England, which would then transfer Iran's assets in the Algerian account wherever the Algerian government wished.
London branches of the Bank of America Citibank, First National Bank of Chicago, Chase Manhattan and Manufacturers Hanover are reported by banking sources here to be involved in the talks. One sticking point has been finding a way to guarantee outstanding Iranian loans from U.S. banks, allowing them to unfreeze Iranian assets.