The confidential talks, involving diplomats and experts from Britain, France and Germany, as well as Iran, are due to last three days, a diplomatic source close to the talks added.

The new round of meetings is taking place amid Iran's continued rejection of a demand to permanently abandon uranium enrichment, a fuel process which can assist in the operation of nuclear power stations but also produces material for nuclear weapons.

The United States maintains that Iran is trying to covertly develop nuclear weapons, while Tehran insists that its programme is purely meant to meet civilian energy needs.

US President George W. Bush on Tuesday urged Iran to heed "the concerns of the world" about its nuclear programme.

"Progress in the Middle East is threatened by weapons of mass destruction and their proliferation," he said, publicly backing the EU's diplomatic push as the talks resumed in Geneva.

"We want our allies to succeed, because we share the view that Iran's acquisition of nuclear weapons would be destabilizing and threatening to all of Iran's neighbors," he said.

Iran agreed in November to suspend enrichment temporarily as a "confidence building measure" to show its intentions are peaceful.

Nonetheless, Tehran is pressing ahead with work on a heavy water reactor at Arak, which can make weapons-grade plutonium, according to the International Atomic Energy Agency (IAEA).

The EU's presidency said Tuesday there was a chance of success with the talks but warned that Iran must maintain its suspension of nuclear enrichment if negotiations were to continue.

Luxembourg deputy foreign minister Nicolas Schmit insisted that it was "important to remain vigilant over the need for Iran to maintain, under surveillance by (UN nuclear inspectors), a total suspension of its activities without exception so long as the negotiations last."

He added that "a total suspension (is) the condition for the continuation and success" of the talks".

The diplomatic source said the first day of talks in Geneva was focusing on political cooperation, with the key nuclear issue only due to be broached on Wednesday and Thursday.

The Europeans have held several meetings with Tehran since December to try to persuade Iran to guarantee that it will dismantle nuclear fuel work in return for technical assistance and economic and political rewards.

The four-party talks this week in Geneva are scheduled to be the last round of technical talks before a higher level steering committee meets at the end of March.

Iran's top nuclear official Hassan Rowhani warned Saturday that his country would never agree to a permanent halt on enriching uranium, while Iranian officials have repeatedly questioned the EU's capacity to strike a deal.

"We cannot have and we will not have negotiations with the Europeans if what they want is an end" to uranium enrichment, Rowhani told reporters in Tehran.

Another diplomat close to the EU-Iran talks said that the hardline language from Tehran had changed littele over recent months.

The diplomat said the Europeans "are waiting to see what it really means," in the meetings in Geneva this week.

Meanwhile, Washington says Iran is "cynically" manipulating a loophole in the Nuclear Non-Proliferation Treaty (NPT), and recently reiterated its threat to take the issue to the UN Security Council to seek international sanctions.

US Secretary of State Condoleezza Rice warned last week that Tehran had shown "no indication" it was ready to seal a deal.

Non-proliferation experts believe that any accord might have to wait until Iranian presidential elections on June 17.

"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," Gary Samore, from London's International Institute for Strategic Studies, said while in Tehran for a nuclear technology conference.

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