But they said Iran's final decision on the question, currently the subject of intensive negotiations with Britain, France and Germany and arousing interest in the United States, is unlikely to come before crucial Iranian presidential elections in June.

"I think those negotiations are in limbo right now. I do not think any progress has been made because Iran has not decided yet whether it is prepared to accept limits on its enrichment programme," explained Gary Samore, Director of Studies at London's International Institute for Strategic Studies.

Speaking to reporters on the sidelines of a nuclear technology conference in Tehran, Samore explained the Islamic regime was presented with a tough choice on whether to press on with its suspect nuclear programme and face the consequences or else choose a path that would ease it relations with the West.

"The question is whether it will insist on completing its enrichment programme and accept the risk of the Security Council taking actions," said Samore, a non-proliferation expert.

"In the run up to the presidential elections, I do not think any of the Iranian officials have any interest in showing any flexibility because they will be strongly criticised for giving away Iran's rights," he explained.

"So I think we have a period of time now when people are exploring different ideas. But I do not think political decisions have been made in Tehran about whether or not to really seek a diplomatic solution."

EU negotiators Britain, France and Germany are trying to convince Iran to dismantle nuclear fuel work which the United States says is part of a covert atomic weapons development, in return for economic and political rewards.

The Europeans see a halt in fuel cycle work, including enrichment, as the only way Iran can provide "objective guarantees" it will not use its atomic energy drive to military purposes.

But Iran insists its nuclear programme is purely for civilian energy needs, and that its fuel cycle work is therefore permitted -- and indeed an "undeniable right" -- under the nuclear Non-Proliferation Treaty (NPT).

The country is also in the midst of a complex politicial transition, where reformists surrounding President Mohammad Khatami are being squeezed out and rival hardliners and conservatives are competing to replace them.

A conservative is seen as being almost certain of winning the presidency in June, but it remains far from certain whether it will be a hardliner -- such as former foreign minister Ali Akbar Velayati -- or a pragmatist, such as top cleric Akbar Hashemi Rafsanjani or nuclear negoiator Hassan Rowhani.

With possible candidates such as Rafsanjani yet to declare whether they will even stand, the race -- and therefore Iran's future political direction -- is seen as still being wide open.

"But after the presidential elections, when there is a new president and a new administration, people might take a fresh look at the issue," explained Samore.

"So the question is whether the EU now with some help from Americans can offer enough incentives to convince Iran to suspend its enrichment long term."

Joseph Cirincione, senior associate and director for non-proliferation at the liberal Carnegie Endowment for International Peace, said any deal would have to be a "win-win deal -- where Iran has to be able to come back to its people with victory."

Iran says the incentives on offer so far are not attractive but at the same time the Islamic republic does not want to be seen as "haggling". One crucial development would be if the US came to the table, a step that could lead to an easing of a quarter of a century of hostility.

"I think right now Washington is considering a number of very modest steps that the United States can take to help. But what is important is thatPresident George W.) Bush has crossed a psychological threshold and accepted the principle that any agreement with the EU is going to have to include active American support," Samore said.

And he said that in addition "nobody in Washington thinks military action is a good option."

"There are still many many months of negotiations before reaching an agreement but the doors are now open for Iran to consider what it would want from the United States in exchange for accepting the limits on its enrichment programme."

Cirincione said that while he saw the Bush administration and Iran as still being "undecided", he said he was "optimistic."

"I think the EU has a real chance of reaching an agreement with Iran."

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