The talks between foreign ministry officials from Britain, France and Germany and Iranian National Security Council official Javad Vaidi are the first contact between the two sides since talks broke off in August, when Iran resumed uranium conversion.
Conversion is the first step in making enriched uranium that can both be nuclear reactor fuel or the explosive core of nuclear weapons.
All four delegations entered the French embassy on the baroque Schwarzenbergplatz in the Austrian capital at about 10:30am (0930GMT).
Tehran made clear Wednesday that it would not stop the process of urnaium conversion.
"From Iran's point of view the subject of the talks is to remove the suspension of the uranium processing facilities and this must happen within a clear timetable," Hossein Entezami, spokesman for Iran's Supreme National Security Council, told Iranian state radio.
Iran will insist on the right to enrich uranium on its own soil during the talks, iran's Foreign Minister Manuchehr Mottaki said in Tehran.
"It is normal when we talk about enrichment for manufacturing nuclear fuel, it means having enrichment and the nuclear fuel cycle on our own territory," Mottaki told reporters.
The tough stance comes at a time when Iran's President Mahmoud Ahmadinejad has raised an international outcry through a series of statements against Israel, notably his remark in October that the Jewish state should be wiped off the map.
"It won't be easy," a diplomat from one of the so-called EU-3 states told AFP, saying the chances of getting Iran to guarantee it will not make nuclear weapons by agreeing to give up enrichment were "not very bright".
The diplomat noted that the two sides have not actually sat down together since April and that the Iranian government has changed since then.
"There is a complete new set of people on the Iranian side, so it's going to be interesting, and a little bit unpredictable," the diplomat said.
An Iranian diplomat said the talks were "just preliminary, setting the platform for the next round."
"It is a good opportunity for the two sides to get to know each other, establish a working relationship and set the framework for future cooperation," the Iranian said.
The EU-3 diplomat said the Europeans are ready to be "realistic and distinguish between what is desirable and what is possible," namely accepting some fuel cycle work but drawing the line at enrichment.
The meeting was scheduled to be "talks about talks", hopefully setting the stage for a resumption of formal EU-Iran negotiations on guaranteeing Tehran will not make nuclear weapons.
A breakdown at this stage, however, would likely spark a push by the Europeans and the United States, which backs the EU-3 initiative but is not attending the negotiations, to send the issue to the UN Security Council for possible sanctions against Iran.
Iran has vowed it will not back down from what it describes as its right under the Non-Proliferation Treaty (NPT) to carry out enrichment as part of a peaceful drive to generate electricity.
Washington charges this civilian effort is a cover for developing atomic weapons.
The West argues that Iran cannot be trusted to carry out enrichment since this process gives nations a "break-out capacity" to make nuclear weapons.
Iran wants to at least be allowed to do research on centrifuges that carry out enrichment.
The Europeans, however, want to push a Russian proposal for Iran to do some fuel cycle at home while enriching uranium only on Russian soil -- thus keeping the most sensitive nuclear work out of the country.
Iran has already rejected this proposal.
"The real diplomatic work at the moment is trying to bring the Russians on board so we can take this to the Security Council," an EU-3 diplomat said.
Russia, which has a veto on the Council, is building Iran's first nuclear power reactor and says there is no sign Iran seeks atomic weapons. It is almost certain to resist this pressure.