Iran and the International Atomic Energy Agency, whose officials wound up a two-day visit to Tehran on Tuesday, are to hold further negotiations, the country's delegate to the UN watchdog said.

"The second round of discussions between Iran and the IAEA on bilateral cooperation finished an hour ago in Tehran. ... These negotiations will continue in the future," Ali Asghar Soltanieh said, quoted by ISNA news agency.

He said the latest talks were intensive and covered "cooperation and mutual understanding between Iran and the IAEA."

An IAEA visit to Tehran late last month was inconclusive.

Iran said earlier Tuesday that it views its nuclear activities as a non-negotiable right, but confirmed that they will be discussed in mooted talks with world powers.

"The issue of our country's peaceful nuclear activities will be on the agenda of talks between Iran and the P5+1 (the five permanent UN Security Council members plus Germany)," foreign ministry spokesman Ramin Mehmanparast said.

"Our main demand is recognition of our right to possess the (nuclear) technology for peaceful purposes," he said. "That right has been achieved, and we don't think there is a negotiable issue regarding our nuclear activities."

Mehmanparast's comments came after talks focused on "possible military dimensions" of the nuclear programme.

The ministry spokesman said the aim of the visit was not inspections but to talk about "a framework to pursue dialogue and cooperation between Iran and the IAEA."

Tensions have risen dramatically this year over Iran's nuclear programme, which much of the West suspects includes research to develop atomic weapons, which Tehran denies.

Israel has provoked increasing speculation that it is poised to launch air strikes on Iran's nuclear sites, raising the possibility of a wider conflict being triggered that could draw in the United States, EU nations and Saudi Arabia.

On Monday, Iran announced its military was holding exercises to boost air defences around its nuclear facilities.

A deputy to the joint chiefs of staff, General Mohammad Hejazi, was quoted by the Fars news agency on Tuesday as saying: "If the Zionist regime (Israel) commits a stupid action, we have a total ability to confront it."

Meanwhile, the European Union was studying Iran's positive response to an offer it made late last year to revive talks with the P5+1 that collapsed in January 2011.

EU foreign policy chief Catherine Ashton said the talks could resume if Iran placed no pre-conditions on them, particularly concerning its nuclear programme.

In the more than three months it took Iran to reply to Ashton's offer of renewed talks, Tehran has forged ahead with its nuclear activities, declaring that it was adding thousands more centrifuges to its uranium enrichment activities and producing what it said was 20 percent enriched nuclear fuel.

"These have been really major achievements," Foreign Minister Ali Akbar Salehi said Tuesday at a joint news conference with his Omani counterpart.

He said Western nations had initially been skeptical of Iran's ability to make the nuclear fuel, but "now we have succeeded they have changed their tone," as presented in Western media.

In November, the IAEA voiced strong suspicions that Iran was engaged in research for an atomic weapon and ballistic missile warhead design.

While confronting challenges on the military and diplomatic fronts, Iran is also battling with the economic pressure from Western sanctions.

On Monday, it said it could expand a halt on oil exports to the European Union, following a stoppage announced at the weekend to France and Britain, in apparent retaliation for an EU oil embargo due come into full effect in July.

The European Union said it could cope with any halt in Iranian supplies.

"The EU is well stocked with oil and petroleum products to face a potential disruption of supplies," an Ashton spokesman said.

In Rome, French Foreign Minister Alain Juppe dismissed Tehran's move.

"Undoubtedly, Iran is very imaginative with regards to provocation. It is not Iran that decided to cut off its deliveries, we are the ones who decided to terminate our orders," he told reporters.

Iran exports about 20 percent of its crude -- some 600,000 barrels per day -- to the European Union, mostly to Italy, Spain and Greece.

Oil prices climbed on Tuesday after debt-laden Greece secured a huge bailout and as traders kept a close watch over Iran, analysts said.

In late London deals, Brent North Sea crude for delivery in April rose by 47 cents to $120.52 a barrel.

New York's main contract, light sweet crude for March, jumped $1.43 to $104.67.

"Due to the lack of major US economic data today, investors' attention will remain to the Middle East for any further signs about the current oil supplies as Iran supply risk is likely to dominate the markets for the short-medium term," said Myrto Sokou, commodities analyst at Sucden Financial Research.