By Justyna Pawlak and Yeganeh Torbati

MOSCOW, June 18 (Reuters) - World powers began two days of talks with Iran on Monday to try to end a decade-long stand-off over Tehran's nuclear programme and avert the threat of a new war in the Middle East.

In Iran, President Mahmoud Ahmadinejad said Tehran would be prepared to stop enriching uranium to a higher level - a process that could be used to make nuclear arms - if the six powers agreed to meet its needs for the fuel. But it is not clear how much influence Ahmadinejad has over the negotiations and whether his remarks reflect Tehran's position in the talks.

Experts and diplomats said a breakthrough was unlikely at the meeting in Moscow, where the world powers are wary of making concessions that would enable Tehran draw out the talks and give it more time to develop a nuclear weapons capability.

Iran strenuously denies it has any wish to obtain such weaponry and says it only wants nuclear technology to generate electricity.

Israel has threatened to bomb Iran if no solution to the dispute is found, oil markets are nervous over the prospect of intensifying regional tensions and the frail world economy can ill afford a further increase in crude prices.

"The atmosphere was fine, business-like and good. We hope this translates into a serious political commitment by the Iranians to address our proposals," a European Union spokesman said after the talks started in the Russian capital.

But a Western official made clear the United States, Russia, China, Britain, France and Germany were ready to deepen Iran's diplomatic and economic isolation if no deal is reached.

"If Iran remains unwilling to take the opportunities these talks present, it will face continuing and intensified pressure and isolation," a Western official said.

The Moscow talks follow two rounds of negotiations since diplomacy resumed in April following a 15-month hiatus.

The United States wants to halt Iran's enrichment of uranium to 20 percent purity, a level which some experts consider to be a dangerous step towards achieving the ability to create the explosive material required to make a nuclear bomb.

Ahmadinejad's comments on enrichment appeared intended to ease pressure from the world powers and encourage them to make concessions at the talks.

"From the beginning the Islamic Republic has stated that if European countries provided 20 percent enriched fuel for Iran, it would not enrich to this level," Ahmadinejad stated in comments published on his presidential website.

But the Iranian president, who stands down at elections next year, has fallen out of favour with Supreme Leader Ayatollah Ali Khamenei, the man who has the ultimate decision-making power over the strategic nuclear programme.


PRESSURE MOUNTS ON IRAN

New U.S. and European Union sanctions are due to come into force in two weeks, tightening economic pressure on Iran.

Without progress to ensure Iran does not develop nuclear arms, Israel "could find itself facing the dilemma of 'a bomb, or to bomb'," Vice Prime Minister Moshe Yaalon said on Sunday.

"Should that be the choice, then bombing (Iran) is preferable to a bomb (in Iran's hands)," he said. "I hope we do not face that dilemma."

The six powers - led by EU foreign policy chief Catherine Ashton - hope at least to win assurances that Tehran is willing to discuss concrete solutions, opening the way to progress.

The six nations want a substantive response to their offer of fuel supplies for a research reactor and relief in sanctions on the sale of commercial aircraft parts to Iran.

At the last talks, in Baghdad last month, they asked Tehran in return to stop producing higher-grade uranium, ship any stockpile out of the country and close down the underground Fordow facility where such work is done.



But Iran's chief negotiator, Saeed Jalili, has indicated the incentives on offer are insufficient.

Iranian officials said Tehran would express dissatisfaction there were no preparatory talks for the Moscow meeting and that progress was possible only if the six powers acknowledged its right to enrich uranium, something they have refused to do until Tehran agrees to in-depth U.N. inspections of its nuclear sites.


GROWING CONCERN

Iran is seeking an end to increasingly tough economic sanctions which have in recent months directly targeted its ability to export oil, its economic lifeblood.

But international concern is growing. The International Atomic Energy Agency failed to persuade Iran, in talks this month, to let it inspect the Parchin military site where it suspects nuclear bomb-related research took place.

Last week, EU officials said Jalili had agreed to give serious consideration to the six powers' proposal. Russia's determination to avoid diplomatic defeat may increase hopes of agreement to at least meet again.

But U.S. and European diplomats have given no public indication of any willingness to scale back economic sanctions. An EU embargo on Iranian oil takes full effect on July 1 and new U.S. financial sanctions some days before that.

Measures including the EU ban on Iranian crude are already taking a toll. Iran's exports have fallen by some 40 percent this year, according to the International Energy Agency . Iran says it has no problem replacing customers that choose to boycott its crude. (Additional reporting by Fredrik Dahl in Vienna, Marcus George in Dubai, Thomas Grove in Moscow and Dan Williams in Jerusalem; Writing by Justyna Pawlak and Steve Gutterman; Editing by Timothy Heritage and Jon Hemming)

IRAN'S NUCLEAR TIMELINE:

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  • Oct. 1, 2009

    <em>Iran's top nuclear negotiator Saeed Jalili answers to a question during a press conference following talks between Iran and six world powers to discuss the Islamic republic's disputed atomic program on October 1, 2009 in Geneva. (FABRICE COFFRINI/AFP/Getty Images)</em><br><br>Iran meets six world powers in Geneva and approves in principle a plan to send 75 percent of its low-enriched uranium to Russia and France, where it would be made into special fuel for a Tehran reactor making medical materials.

  • Oct. 25, 2009

    <em>International Atomic Energy Agency (IAEA) inspectors arrive at Imam Khomeini airport in Tehran early on October 25, 2009. Four inspectors of the UN International Atomic Energy Agency arrived in Tehran to check Iran's controversial second uranium enrichment plant. (BEHROUZ MEHRI/AFP/Getty Images)</em><br><br> U.N. nuclear experts inspect a newly disclosed enrichment plant being built inside a mountain bunker.

  • Oct. 30, 2009

    <em>Herman M.G. Nackaerts, who led the International Atomic Energy Agency (IAEA) inspectors team to Iran, speaks to journalists upon his arrival on October 29, 2009 at Vienna airport from Iran. (SAMUEL KUBANI/AFP/Getty Images)</em><br><br>Iran tells the International Atomic Energy Agency (IAEA) it wants fresh nuclear fuel for a reactor in Tehran before it will agree to ship enriched uranium stocks to Russia and France, according to U.N. officials.

  • Nov. 18, 2009

    <em>A picture shows the reactor building at the Russian-built Bushehr nuclear power plant in southern Iran on August 21, 2010 during a ceremony initiating the transfer of Russia-supplied fuel to the facility after more than three decades of delay. (ATTA KENARE/AFP/Getty Images)</em><br><br>Tehran says will not send enriched uranium abroad but will consider swapping it for nuclear fuel within Iran.

  • Nov. 27, 2009

    <em>A file satellite image taken Sunday Sept. 27, 2009, provided by DigitalGlobe, shows a suspected nuclear enrichment facility under construction inside a mountain located north of Qom, Iran. (AP Photo/DigitalGlobe, File)</em><br><br>The IAEA's 35-nation governing board censures Iran for developing the Fordow plant near Qom in secret and demands Iran freeze the project. Iran rejects the demand.

  • Jan. 19, 2010

    <em>Iran's chief negotiator Saeed Jalili looks on during a press conference closing nuclear talks on December 7, 2010 in Geneva. (FABRICE COFFRINI/AFP/Getty Images)</em><br><br>Iran rejects key parts of the deal to send abroad for processing most of its enrichment material.

  • Feb. 9, 2010

    <em>NATANZ, IRAN - APRIL 9: A general view of the Natanz nuclear enrichment facility, is seen on April 9, 2007, 180 miles south of Tehran, Iran. (Majid Saeedi/Getty Images)</em><br><br>Iran begins making higher-grade nuclear fuel, enriched to a level of 20 percent, at the Natanz plant.

  • Feb. 18, 2010

    <em>Delegates watch the opening of the International Atomic Energy Agency (IAEA) board of governors meeting at agency headquarters in Vienna on September 27, 2010. (SAMUEL KUBANI/AFP/Getty Images)</em><br><br>An IAEA report suggests for the first time Iran might be actively chasing nuclear weapons capability rather than merely having done so in the past.

  • May 17, 2010

    <em>Brazilian Minister of Foreign Affairs, Celso Amorim, gestures during a press conference at Itamaraty Palace in Brasilia, on May 18, 2010, on the nuclear agreement between Brazil, Iran and Turkey. (EVARISTO SA/AFP/Getty Images)</em><br><br>Iran, Brazil and Turkey sign a nuclear fuel swap deal. Iran says it has agreed to transfer low-enriched uranium to Turkey within a month in return for higher-enriched nuclear fuel for a medical research reactor. The deal is not implemented due to lack of U.S., French and Russian involvement.

  • June 9, 2010

    <em>U.S. President Barack Obama arrives to make a statement regarding a United Nations Security Council vote on new sanctions for Iran in the Diplomatic Reception Room of the White House on June 9, 2010 in Washington, DC. (Roger L. Wollenberg-Pool/Getty Images)</em><br><br>U.N. Security Council votes to expand sanctions against Iran to undermine its banking and other industries.

  • June 24, 2010

    <em>This photo shows a branch of Iranian Bank Tejarat in Tehran on January 24, 2012. (ATTA KENARE/AFP/Getty Images)</em><br><br>U.S. Congress approves tough new unilateral sanctions aimed at squeezing Iran's energy and banking sectors.

  • July 26, 2010

    <em>Former Iranian president and head of Iran's Assembly of Experts, Akbar Hashemi Rafsanjani, delivers a speech during a meeting of the top clerical body in Tehran on September 14, 2010, urging Iranian officials against dismissing the sanctions as 'jokes', saying that the Islamic republic was facing its worst ever 'assault' from the global community. (ATTA KENARE/AFP/Getty Images)</em><br><br>The EU imposes tighter sanctions on Iran.

  • Dec. 5, 2010

    <em>Iran's Foreign Minister Ali Akbar Salehi speaks to journalists after the Conference on Disarmament at the European headquarters of the United Nations in Geneva, Switzerland, Tuesday, Feb. 28, 2012. Salehi has called for other countries to chose engagement over confrontation in resolving their differences over his nation's nuclear program. (AP Photo/Keystone, Jean-Christophe Bott)</em><br><br>Iran's nuclear energy chief Ali Akbar Salehi says Iran will use domestically produced uranium concentrates, known as yellowcake, for the first time at a nuclear facility, cutting reliance on imports of the ingredient for nuclear fuel.

  • Dec. 6, 2010

    <em>Iran's chief negotiator Saeed Jalili (R) gestures next to EU foreign policy chief Catherine Ashton in the foyer of the conference center near the Swiss mission to the United Nations on December 6, 2010 in Geneva. (ANJA NIEDRINGHAUS/AFP/Getty Images)</em><br><br>Talks begin in Geneva between Iranian nuclear negotiator Saeed Jalili and EU foreign policy chief Catherine Ashton, who is leading the discussions on behalf of big powers.

  • Jan. 21, 2011

    <em>US Secretary of State Hillary Clinton speaks about Iran during a press conference with Bahraini Foreign Minister Sheikh Khalid bin Ahmed Al Khalifa following their meeting at the US State Department in Washington, DC, February 3, 2010. (SAUL LOEB/AFP/Getty Images)</em><br><br>World powers fail to prise any change from Iran in talks, with the EU and U.S. calling the discussions disappointing and saying no further meetings are planned.

  • June 9, 2011

    <em>Demonstrators hold effigies of Iranian President Mahmoud Ahmadinejad, Syrian President Bashar al-Assad (L) and Iran's religiuous leader Ayatollah Ali Khamenei during a protest outside the 66th UN General Assembly at the United Nations headquarters in New York, on September 22, 2011.</em><br><br>Russia and China join Western powers in telling Iran its "consistent failure" to comply with U.N. resolutions "deepened concerns" about possible military dimensions to its nuclear program.

  • Aug. 23, 2011

    <em>International Atomic Energy Agency (IAEA) chief inspector Herman Nackaerts arrives with his team at the Vienna airport from Iran, on February 22, 2012. (DIETER NAGL/AFP/Getty Images)</em><br><br>Iran allows IAEA Deputy Director General Herman Nackaerts rare access to a facility for developing advanced uranium enrichment machines during a tour of the country's main atomic sites, an Iranian envoy says.

  • Sept. 3, 2011

    <em>The head of the Iranian Atomic Energy Organization Fereydoun Abbasi Davani (2nd L) and Russian Energy Minister Sergei Shmatko (R) shake hands during a ceremony in the southern port city of Bushehr on September 12, 2011, to celebrate hooking up Iran's first nuclear power plant in Bushehr to the national grid, supplying 400 megawatts of its 1,000 megawatt capacity. (AMIR POURMAND/AFP/Getty Images)</em><br><br>Russian-built Bushehr nuclear power plant begins to provide electricity to the national grid, IRNA reports.

  • Jan. 9, 2012

    <em>Alireza Jafarzadeh arranges satellite images and maps allegedly showing location of an industrial site near Tehran that produces components for centrifuges used to enrich uranium, before a press conference in Washington, DC, on April 7, 2011. (JEWEL SAMAD/AFP/Getty Images)</em><br><br>IAEA confirms Iran began refining uranium to a fissile purity of 20 percent at Fordow.

  • Feb. 15, 2012

    <em>Iranian President Mahmoud Ahmadinejad unveils a sample of the third generation centrifuge for uranium enrichment during a ceremony to mark the National Nuclear Day day in Tehran on April 9, 2010. (BEHROUZ MEHRI/AFP/Getty Images)</em><br><br>Iran proclaims nuclear advances, including new centrifuges able to enrich uranium much faster. The next day Iran proposes a resumption of nuclear talks with world powers.

  • Feb. 20-21, 2012

    <em>Hans Blix(R), former general director of the United Nations (UN) International Atomic Energy Agency (IAEA) and Robert Kelley, former IAEA chief inspector in Iraq chat February 21, 2012 before a panel discussion on Iran's nuclear capabilities on Capitol Hill in Washington, DC. (KAREN BLEIER/AFP/Getty Images)</em><br><br>Senior U.N. inspectors end a second round of talks in Tehran, without success and without inspecting a military site at Parchin.

  • March 5, 2012

    <em>International Atomic Energy Agency (IAEA) Director-General Yukiya Amano (C) looks on during an IAEA board of governors meeting at the UN atomic agency headquarters in Vienna on March 5, 2012. (DIETER NAGL/AFP/Getty Images)</em><br><br>Iran has tripled its monthly production of higher-grade enriched uranium and the IAEA has "serious concerns" about possible military dimensions to Tehran's activities, IAEA head Yukiya Amano says.

  • March 6, 2012

    <em>European Union's Foreign Policy chief Catherine Ashton gives a press conference after a meeting on April 14, 2012 as Iran and six world powers open talks on Tehran's disputed nuclear programme in Istanbul. (BULENT KILIC/AFP/Getty Images)</em><br><br>EU foreign policy chief Catherine Ashton accepts Iran's offer of new talks, after a year's standstill. U.S. President Barack Obama says the announcement offers a diplomatic chance to defuse the crisis and quiet the "drums of war". Iran says it will let U.N. nuclear inspectors visit Parchin but diplomats note a proviso saying access to the site hinges on a broader agreement on outstanding issues.

  • April 10, 2012

    <em>A sign shows gas prices over five dollars a gallon for all three grades at a EXXON service station on March 13, 2012 in Washington, DC. According to AAA the average price of gas has climbed three tenths of a cent nationwide as a result of high oil prices and tensions tied to Iran's nuclear program. (Photo by Mark Wilson/Getty Images)</em><br><br>Iran cuts oil exports to Spain and may halt sales to Germany and Italy, state television reports, in an apparent move to strengthen its position ahead of crucial talks.

  • April 12, 2012

    <em>Iranian President Mahmoud Ahmadinejad waits for the arrival of Iraqi Shiite Vice President Khudayr al-Khuzaie prior to a meeting in Tehran on March 10, 2012. (ATTA KENARE/AFP/Getty Images)</em><br><br>Ahmadinejad says the Islamic state will not surrender its nuclear rights "even under the most difficult pressure".

  • April 14, 2012

    <em>Iran's chief nuclear negotiator Said Jalili gives a press conference on April 14, 2012 as Iran and six world powers open talks on Tehran's disputed nuclear programme in Istanbul. (BULENT KILIC/AFP/Getty Images)</em><br><br>Talks between Iran and the United States, France, Germany, China, Russia and Britain resume in Istanbul. A diplomat describes the atmosphere at the opening session as "completely different" from that of previous meetings. Iran has promised to put forward "new initiatives".