Policy director at the US State Department, Brian Hook revealed on Wednesday that Washington and European powers are holding negotiations on details in the Iran nuclear deal that would force it to cease its regional activity and stop backing terrorist organizations. "We have had constructive talks with the Europeans towards a supplemental agreement but I can’t predict whether we will reach an agreement with them or not," he told reporters in a conference call. "We are engaged in contingency planning because it would not be responsible not to," he added. Hook held talks with British, French and German officials in Berlin. US President Donald Trump gave an ultimatum on January 12 to the European powers, saying they must agree to “fix the terrible flaws” of the 2015 Iran nuclear deal or he would refuse to extend the US sanctions relief on Iran that it calls for. US sanctions will resume unless Trump again waives them on May 12. Given a mid-May deadline, US negotiators are working with the three European powers on a follow-on pact that would address Trumps three major complaints on the 2015 nuclear deal. First, Trump wants to penalize Iran for ballistic missiles, which were not part of the original deal. He also wants to expand access for international nuclear inspectors and prolong the limits on Irans nuclear activity, currently scheduled to expire in several years. Hook said if there is no agreement by May, Trump will certainly withdraw. If there is an agreement, Trumps advisers will present it to him. Hook referred repeatedly to "long-range" missiles or "ICBMs" as one of Trumps primary concerns. However, congressional Republicans who opposed the agreement, along with some Democrats and other nations in Irans neighborhood, have told Trump that excluding medium-range missiles leaves them at risk. According to one outside adviser briefed on the status of the talks, the negotiating team is currently working on a double-pronged "fix" that would separate Irans missiles into two categories: nuclear-capable long-range, intercontinental ballistic missiles that can hit Europe, and shorter-range projectiles that could hit regional countries. Sanctions could be imposed for both, but those for long-range missiles would likely be harsher and kick in more automatically if Iran tested or transferred them. Those sanctions could also target Iranian entities that were exempted from penalties under the nuclear deal. The Iran deals critics argue the restrictions must cover both long- and medium-range missile tests and transfers, and that the penalties for both should be just as tough. They also want all nuclear-capable missiles to be treated as part of Irans banned nuclear program, rather than dealt with separately. Iran argues it is not receiving the full benefits of the sanctions relief, in part because big banks have continued to stay away for fear of falling foul of remaining US sanctions. Hook said he had rejected this argument. “Iran’s opaque economy makes it hard for investors to know whether they’re supporting commerce or supporting terrorism,” he said. “Iran needs to stop sponsoring terrorism and overhaul its banking and business sectors.” He also played down Iranian concerns that Trump has yet to approve licenses for Western aircraft companies to sell to Iran although the Obama administration did so. “I said to them you use your commercial airlines to move terrorists and weapons around the Middle East, including to Syria, and we will not issue licenses at the expense of our national security,” Hook said.