A good way to understand the issues in the current discussions of Iran's nuclear program would be to read armscontrol.org 's history of official proposals from both sides on Iran's nuclear issue.
That website seems to consistently make mistakes in favor of making the US/EU seem more reasonable than they have been. Notable ones are that the EU 2005 proposal would have given the each of the EU negotiators a permanent veto over Iran ever enriching uranium again, that the 2009 proposal would have possibly seen deliveries of TRR fuel over three years rather than one and ignoring the US/EU's criticism of the Brazil/Turkey proposal that it would have permitted Iran to actually retrieve its uranium if the US/EU did not ever supply TRR fuel.
My current take is that the US nuclear policy community has completely given up on preventing Iranian enrichment to 5% and is now hoping to prevent Iran from stockpiling 20% LEU.
The Russian proposal which seems to be the basis for the current discussions seems to call for freezing Iran's program where it is, including ongoing 5% enrichment I guess for as long as Iran wants. At this point, additional 5% LEU is not very strategically valuable and there is no plausible pretext to reduce Iran's stock from almost six tons to less than one any more.
I don't know if Iran will or should accept the Russian proposal. It depends, I think on how Iran perceives additional sanctions. If Iran perceives then the way a commenter over at Race For Iran named FYI does, as an opportunity to increase its independence from the West, then it will not be willing to trade anything of strategic value for it.
Elsewhere on that site we also see more details about the dispute over Parchin.
It looks like the West wants to test if experiments were done on explosions of natural uranium. These experiments would not violate Iran's safeguards agreement if they happened. If they did happen, it is close to certain that analogous experiments have at one time or another been performed by states in good standing such as Brazil, Japan, South Korea, Canada, Germany and others and whether or not in some sense they are illegal, any of those states would, as would be completely within their rights under the NPT, just deny the IAEA access to any facilities where such experiments occurred.
Because Iran is saying that it is willing to allow inspections if a work-plan such as the one Iran reached with ElBaradei is established that will lead to a statement that all questions have been answered - the US has simply prevented the IAEA from holding up its agreement on the previous work plan - my best guess is that Iran would be exonerated by an inspection of Parchin. But that's just a guess.
This all brings us to the question of what happens in May.
Iran pretty clearly, I think can have a deal much better than what it was willing to accept in 2005 or 2006. On the other hand, Iran has paid a lot more for its program than it had in 2005 or 2006, including five nuclear scientists who were killed probably by the US or its allies.
I think the key issues are:
1) Iran cannot allow a US veto to be imposed on future generations of Iranian leaders. Under some objective set of circumstances, such as by a set time, any limitations Iran accepts will have to be, by the explicit terms of any deal, subject to be unilaterally released by Iran.
2) If we assume Iran will have six months, or some amount of months, of warning as a crisis develops that could actually lead to military action against Iran, what could Iran do with its nuclear program over that time? The stockpile Iran has of 5% LEU already gives Iran some flexibility in such a scenario, but a stockpile of 20% would give more. This is fairly unlikely to be a concern over the next three or five years but the future becomes more difficult to predict further away so flexibility over longer time frames becomes more important.
I don't think Iran is worrying about an attack from either the US or much less Israel. For an explanation, there is a pdf at the same site:
Marvin Weinbaum, scholar-in-residence at the Middle East Institute, recently explained in The National Interest how a “rationally thinking Iranian leadership” could even welcome the “rich dividends” that a military strike on Iranian soil could yield:Iran also still has the advantage that for whatever reason, the US refuses to publicly acknowledge an Iranian right to enrich. So the US would not be able to go over the head of the Iranian government and tell the Iranian public that 20% enrichment is what is blocking a deal, if that was the case.International sympathy for Iran would increase dramatically.... The hard fight for economic sanctions against Iran would, in all probability fall apart.... Washington and Tel Aviv would be lumped together as aggressors.... The continued presence of American military bases in the Gulf could become untenable.Weinbaum sees the domestic payoff to be equally appealing to Khamenei’s hard-line regime:An attack on the homeland could set back chances for the revival of the reformist Green Movement for at least a decade. Even the reformers have been solidly in favor of Iran retaining its nuclear program. Who now at home or abroad would dare question the regime’s argument if it decide[d] to build a bomb?Outside the borders of the United States, incessant repetition of Washington’s intention to launch a unilateral preventive attack on Iran, if necessary, is widely construed as evidence that the United States perceives itself to be immune from international law.
The US also can be trusted to add some terms, especially such as a permanent effective US veto over the development of Iran's nuclear industry that Iran's public would reject anyway.
So maybe in May we'll get a work plan that trades Parchin for a statement that all of the IAEA's questions have been resolved and an agreement that Iran will, for some time, refrain for enriching beyond 5% or otherwise expanding its nuclear program.
Just as likely, maybe more likely, in May we'll see that the US intends for Parchin to be one more of an never-ending string of contrived questions and if so, Iran will refuse to indulge it. We'll also see that Iran, now that it has about 120kg of 20% LEU is willing to stop there, but not willing to relinquish it, even though it would have been willing to forego enriching to 20% as recently as this time in 2010.
The question is how afraid is Iran of additional sanctions. One thing to remember is that regimes in Cuba, North Korea and Iraq survived sanctions much more stringent than anything feasible for Iran. Another is that if Iran gets to the table in 2017, after the next US presidential term, reducing the stock of 20% may then be as unimaginable then as reducing the stock of 5% is now. Then the issue might be an agreement not to bring a heavy water reactor on line - which itself might be off the table two or three years later.
Whenever Iran makes a deal, it can get what it asked for in 2006, lifting sanctions - but if it gets it later, it can have traded the short term or temporary cost of sanctions for a longer term strategically valuable improvement in its nuclear position.
Iran might be magnanimous and willing to put the nuclear dispute into the past. The difference between having and not having 20% LEU, and the size of any 20% stockpile is much smaller than the difference between enriching and not enriching which was the point of dispute until this year.
Or Iran might not be as clumsy in public, but in effect adopt George W. Bush's position of "bring it on". If the West thinks it will scare Iran with sanctions and this stupid "military option on the table" stuff, what happens if Iran does not blink? I don't think there is anyone important in Iran today who thinks Iran should have taken any of the deals previously offered. It is somewhat reasonable to expect that its position in April 2013 will be better than its position today, so that making a deal today could be counter-productive.
We shall see. Iran's nuclear issue is shaping into the second most important strategic event in the Middle East today after the question of whether or not in Egypt the US will be able to maintain the pro-US colonial dictatorship's control over foreign policy contrary to local popular preference.