Western nations are prepared to renew sanctions against Iran if it does not cooperate with the international community over its nuclear program, German Chancellor Angela Merkel said Friday.

“If Iran does not meet its obligations, or does not meet them adequately, we remain ready to take back the current limited suspension of sanctions,” Merkel was quoted by Reuters as saying at a US Chamber of Commerce event.

However, the German leader insisted a final deal could be reached. “First of all, we have to give the negotiations a chance,” she said.

A senior Russian Foreign Ministry official said Thursday that Iran’s unprecedented cooperation with the UN’s nuclear watchdog and six world powers raises hope that an agreement can be reached to limit Iran’s ability to build nuclear arms before the July 20 deadline.

Mikhail Uliyanov, director of the ministry’s Department of Arms Control and Nonproliferation, said an action plan agreed to by both sides on November 24 “is being implemented consistently.”

“We are confident that the unprecedentedly constructive cooperation of Iran with the [International Atomic Energy Agency] as well as with the [six powers] gives grounds to hope for a successful outcome of the talks on a comprehensive solution to Iran’s nuclear issue before the deadline,” he said.

A new round of talks on Iran’s nuclear program is scheduled to be held in New York next week. Iran is hoping the talks with the US, Russia, Britain, France, China and Germany will result in relief from the sanctions which have crippled its economy — particularly by slashing vital oil exports and severely restricting international banking transactions

Iranian President Hassan Rouhani defended a potential nuclear deal with the West on Tuesday, insisting that an agreement would benefit the majority of Iranians.

In a primetime interview lasting 90 minutes, Rouhani, who is under growing pressure from hardliners and hard-pressed citizens, stood by the steps taken to ensure removal of sanctions imposed on Iran over its nuclear ambitions.

He also said that relations with the United States, marked by decades of hostility, “have been and will be difficult,” but it was possible that “tensions with all countries can be reduced.”

“The people are very happy about the sanctions being lifted,” Rouhani said on state television, referring to last November’s interim deal that won Iran modest relief and ensured the release of billions of dollars from frozen overseas accounts.

Sanctions have crippled Iran’s economy, which remains in recession, but the president condemned those who profited from the restrictions while ordinary citizens suffered.