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World powers and Iran have reached a tentative agreement on sanctions relief, diplomats said yesterday, stoking fears that easing economic penalties against the Islamic Republic may mean more money for terror groups in the Middle East.

“I think if this funding is allowed to flow from Iranian banks to some of their beneficiaries, it could put Americans and European neighbors in a dangerous place,” U.S. Rep. Stephen Lynch told the Herald yesterday. “There are two sets of sanctions out there, one is broadly described as being connected to their nuclear program and the second is tied to their terrorist financing operations. The concern that we have is how we will bifurcate those two issues. The first needs to remain in place and the other creates some real problems for us.”

As Lynch pointed out, American officials have been struggling to separate the “nuclear-related” sanctions it is prepared to suspend from those it wishes to keep, including measures designed to counteract Iranian ballistic missile efforts, human rights violations and support for U.S.-designated terrorist organizations.

Word of significant progress indicated the sides were moving closer to a comprehensive accord that would set aside a decade of restrictions on Tehran’s nuclear program in exchange for tens of billions of dollars in economic benefits for the Iranians. The U.S. and much of the world fear Iran’s enrichment of uranium and other activity could be designed to make nuclear weapons. Iran says its program is meant only to generate power and for other peaceful purposes.

Former secretary of state and Democratic presidential front-runner Hillary Clinton said yesterday she remains hopeful the U.S. can reach a “strong, verifiable deal” to curb Iran’s nuclear weapons program by Tuesday’s deadline.

“I’m hoping it’s a strong, verifiable deal that will put the lid on Iran’s nuclear weapons ambitions,” Clinton said while campaigning in the Granite State. “Even if we are successful, however, Iran’s aggressiveness will not end.”

Herald wire services contributed to this report.