Vienna/Tehran — Iran has offered a last-minute compromise to UN atomic inspectors that stops short of completely curtailing their intrusive monitoring powers, tapping the brakes on a standoff that is escalating to become the Biden administration’s first big foreign policy challenge.

The head of the International Atomic Energy Agency ended talks on Sunday in Tehran without convincing Iranian foreign minister Mohammad Javad Zarif to roll back a law that will suspend comprehensive snap inspections and other monitoring measures from Tuesday...

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