Iran's chief negotiator Saeed Jalili addresses a news conference after a meeting in Baghdad. Photo: Thaier Al-Sudani

Baghdad - Iran and world powers agreed to meet again in Moscow next month for more talks to try to end the long-running dispute over Tehran's nuclear programme, but there was scant progress to resolve the main sticking points between the two sides.

At the heart of the dispute is Iran's insistence that it has the right to enrich uranium and that economic sanctions should be lifted before it stops activities that could lead to its achieving the capability to make nuclear weapons.

Western powers insist Tehran must first shut down enrichment activities before sanctions can be eased.

But both sides have powerful reasons not to abandon diplomacy. The powers want to avert the danger of a new Middle East war raised by Israeli threats to bomb Iran, while Tehran also wants to avoid a looming Western ban on its oil exports.

After discussions in Baghdad extended late into an unscheduled second day between envoys from Iran and the six powers, European Union foreign policy chief Catherine Ashton said it was clear both sides wanted progress and had some common ground, but significant differences remained.

“We will maintain intensive contacts with our Iranian counterparts to prepare a further meeting in Moscow,” she told a news conference in Baghdad.

Ashton leads the negotiations for the six-country group made up of the five permanent members of the United Nations Security Council - Britain, China, France, Russia and the United States - which together with Germany is known as the P5+1.

The next meeting, the third in the latest round of talks that began in Istanbul last month, will be held in Moscow on June 18-19.

Ashton said the six powers wanted practical steps from Iran to address concerns over its nuclear work.

Chief among such concerns is Iran's ability to enrich uranium to a fissile purity of 20 percent. That is the nuclear advance most worrying to the West since it hurdles technical obstacles to reaching 90 percent, or bomb-grade, enrichment.

“Iran declared its readiness to address the issue of 20 percent enrichment and came with its own five point plan, including their assertion that we recognise their right to enrichment,” Ashton added.

Iran says it will not exceed 20 percent and the material will be made into fuel for a research reactor.

“Talks were intensive and long,” said Iranian chief negotiator Saeed Jalili. “They were detailed, but are left unfinished.”

“The atmosphere of these talks was positive for the two sides to talk about their issues in a clear way. We believe the result of these talks was that we were able to get to know each other's views better and more.”

But enriching uranium, he said, was “an undeniable right of the Iranian nation”.

Iran has hinted at flexibility on higher-grade enrichment but Iranian media said it would not give away its most potent bargaining chip without significant concessions on sanctions.

Jalili denied the P5+1 had offered a new package of proposals during the meeting: “They proposed one suggestion about the issue of uranium enrichment. We have said that any cooperation (in this area) would depend on the preservation of Iran's right to enrich uranium.”

While there was little if any concrete progress, the fact that the two sides agreed to continue talks was a sign of progress in itself, after more than a year of not meeting at all before the latest round of negotiations began in April.

“The two sides' commitment to diplomacy in the absence of any clear agreement is a positive sign,” said Ali Vaez, Iran expert at the International Crisis Group think-tank.

“All parties should be commended for returning to the negotiating table. Obama should be commended for having turned diplomacy into a process rather than the one-off meetings that existed in the past,” wrote Trita Parsi, President of the Washington-based National Iranian American Council.

“Both sides entered negotiations with their maximalist positions, and neither budged,” he said. “Looking ahead, now the hard work begins.”

The United States and its allies suspect Tehran is trying to develop a nuclear weapons capability and have imposed tough sanctions on Iran's energy and financial sectors to try to force it to compromise and open up its activities to scrutiny.

EU states are set to introduce a total embargo of Iranian crude oil purchases in July. Diplomats say that potentially persuasive measure will not be cancelled unless Tehran takes substantial steps to curb its nuclear activities. - Reuters