The EU's top diplomat said after Tehran talks yesterday Iran hoped to reply soon to an offer of enhanced incentives to shelve nuclear work, even after a government spokesman again ruled out halting uranium enrichment.
Six world powers behind the package want Iran to suspend enrichment activity during negotiations regarding the offer, European Union foreign policy chief Javier Solana said.
"It is an offer that is going to be considered (by Iran) and we are waiting for the answer that they hope will be soon," Solana told a news conference during a rare trip to Tehran.
"We continue to ask for suspension, suspension during the time of negotiations and we will (then) see the outcome of negotiations," he said after presenting the package of trade and other benefits.
He said he hoped the powers' overture, tailored to coax Tehran into stopping nuclear activity of possible use in building atom bombs, would be a starting point for negotiations.
Iran has repeatedly ruled out ending its quest for an enrichment industry, which could yield fuel for power plants - its stated goal - or weapons, but says it is ready to engage in negotiations with the world powers.
"Iran's view is clear: any precondition is unacceptable," government spokesman Gholamhossein Elham said when asked about the revised package from the US, China, Russia, France, Britain and Germany.
"If the package includes suspension it is not debatable at all," he told reporters.
But Iranian officials and Solana still agreed in meetings in Tehran to resume efforts to find a diplomatic solution to a standoff that has helped push oil prices to record highs, Iranian sources said.
"A new diplomatic path has been opened ...this will be a basis for fresh nuclear talks," said an Iranian official, who declined to be named. A European diplomat said: "Both sides agreed to remain in contact and continue working."
There was no indication the two sides had bridged their differences on the issue at the centre of the dispute - Iran's refusal to heed UN demands to halt nuclear enrichment.
The United States and its European allies have warned of more sanctions against the Islamic Republic if it rejects the package of incentives presented to Tehran by Solana. The world's fourth-largest crude producer says it will not stop activities it insists are only for generating electricity.
Iran has not formally rejected the offer, but US President George W. Bush said he was disappointed by Elham's statement.
"I am disappointed that the Iranian leaders rejected this generous offer out of hand," Bush told a joint news conference with French President Nicolas Sarkozy, adding it was a sign that Iran's leadership was willing to isolate its people further.
Elham was speaking shortly after Solana presented the world powers' proposal to Iranian Foreign Minister Manouchehr Mottaki.
The offer, including civilian nuclear co-operation, is a more precise version of one rejected by Iran two years ago but diplomats have played down any hopes of a breakthrough.
Mottaki suggested Iran was ready to engage in negotiations but linked its response to the major powers' incentives to their reaction to Tehran's own package of proposals aimed at defusing the row, submitted to the EU and others last month.
"It is natural that Iran's response ...will depend on the logical and constructive response of (the six powers) to the Iranian package," Mottaki said, according to IRNA news agency.
Diplomats say Iran's package ignored concerns about its uranium enrichment programme, a possible pathway to atom bombs.
But the Iranian official who spoke on condition of anonymity said the two sides saw "common points" in their proposals.
The incentives package, hammered out by six major powers in May, updates an offer spurned by Iran two years ago that also included trade in aircraft, energy, technology and agriculture.
Solana said on Friday the offer, which he described as "generous", would support Iran in developing a modern nuclear energy programme and also covered political and economic ties.
Iran's unwillingness to stop enrichment, which can provide fuel for power plants or material for bombs if refined much more, has drawn three rounds of UN sanctions since 2006.
The United States says it wants a diplomatic solution but has not ruled out military action as a last resort.