The talks between Iran's atomic agency and a team of IAEA inspectors, who arrived here overnight Wednesday, cover the modalities for visits across Iran in the coming days and weeks aimed at determining whether the country is secretly developing nuclear weapons.
An Iranian official confirmed the talks were underway, but declined to give any further details.
The inspectors' visit, described by IAEA head Mohammad ElBaradei as "decisive", will be the last round of international investigations ahead of an October 31 deadline given to Iran to come clean on its nuclear programme.
"We do expect that we will make a lot of progress with the full cooperation of Iran and that's why I'm going," said Pierre Goldschmidt, an IAEA deputy director general, ahead of the visit.
Goldschmidt said he expected Iranian officials to "have a very important message for us" on extending cooperation "and that we can progress very rapidly because as you know we have only a few weeks to make progress."
According to the conservative Entekhab newspaper, Iran's leadership met late into the night to hammer out their "final repsonse to the IAEA resolution."
The paper said the meeting included President Mohammad Khatami, parliament speaker Mehdi Karubi, judiciary chief Ayatollah Hashemi Shahrudi, powerful former president Akbar Hashemi Rafsanjani and national security council head Hassan Rohani.
Aside from urging Iran to unconditionally sign, ratify and implement an additional protocol to the Non-Proliferation Treaty (NPT) allowing tougher inspections, the IAEA has set October 31 as a deadline for Iran to prove it is not secretly developing nuclear weapons.
Iran has also been asked to cease uranium enrichment, following the discovery during previous visits by IAEA inspectors of traces of highly enriched uranium.
Tehran fiercely denies allegations that it is seeking to develop nuclear weapons, and asserts it is merely exercising its right to develop nuclear power to meet future energy needs.
Officials have also argued that the traces of enriched uranium came into the country on imported equipment.
But whether Iran will sign the protocol or meet the deadline remains a subject of intense speculation.
Although vowing continued cooperation with the IAEA, a string of top officials here have branded the September 12 resolution -- which fixed the deadline -- as part of a US-Israeli plot to undermine the nearly 25-year-old Islamic regime.
Nevertheless, officials here are keen to prevent the issue being forwarded by the IAEA to the UN Security Council, which in turn could sanction Iran for its non-compliance.
The United States said Monday it would press for Iran's nuclear program to be referred to the Security Council if Tehran does not meet the deadline.