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Israel does not object to talks between the West and Iran intended to stop Iran's nuclearization, as long as Iran does not take advantage of these talks, a top source in Benjamin Netanyahu's government told Haaretz Thursday.

The source was commenting on the announcement by U.S. President Barack Obama's administration that it will fully participate in talks with Iran on its nuclear program, putting the ball in Tehran's court with a new engagement policy.

Israel expects the international community to act firmly to prevent Iran from obtaining nuclear weapons, the Israeli source said.

Iran will be a central issue at Netanyahu's scheduled meeting with Obama next month. The two will also discuss the Palestinian issue.

The United States and five other powers - Britain, China, France, Germany and Russia - extended an invitation for direct talks with Iran, a U.S. arch foe since its 1979 Islamic Revolution.

U.S. Secretary of State Hillary Clinton said Thursday she did not view the latest Iranian claims about its nuclear program as a rebuff to U.S. overtures to engage Tehran.

"We do not attribute any particular meaning, with respect to the range of issues that we are looking to address with the Iranians, from this particular statement," Clinton said at a news conference when asked about an Iranian statement that it was now running 7,000 enrichment centrifuges.

She also cast doubt on Iranian claims of major progress in its nuclear program. "We don't know what to believe about the Iranian program. We've heard many different assessments and claims over a number of years," she said.

Iran announced further progress in its disputed nuclear program on Thursday, one day after world powers said they would invite Tehran to direct talks, but the declaration met some Western skepticism.

Iranian President Mahmoud Ahmadinejad said Tehran was ready for negotiations if they were based on respect and justice, but also said Iran had mastered the nuclear fuel cycle and tested new, more advanced machines for enriching uranium.

Speaking at the same televised event to mark Iran's National Nuclear Day, the head of Iran's Atomic Energy Organiztion, Gholomreza Aghazadeh, said it was now running 7,000 enrichment centrifuges. In February, Iran had said the number was 6,000.

Ahmadinejad on Thursday inaugurated the country's first nuclear fuel manufacturing plant (FMP) located near the central Iranian city of Isfahan.

"The Iranian nation has from the beginning been after logic and negotiations, but negotiations based on justice and complete respect for rights and regulations," Ahmadinejad said in a televised speech.

The nuclear fuel manufacturing plant will produce pellets of uranium oxide to fuel the heavy-water research reactor, which is scheduled to be completed in 2009 or 2010.

The process is distinct from uranium enrichment, which produces fuel for a light-water reactor. Highly enriched uranium can be used to build a warhead as well. Iran's enrichment program presents more immediate concerns to the West than the hard-water reactor, because it is far more advanced.

Iran denies any intention to build a nuclear weapon. The U.S. and its allies have expressed concerns Iran could reprocess spent fuel from the heavy-water reactor into plutonium for building a warhead.

Iran earlier on Thursday said it will decide on an offer of nuclear talks made by the United States and five other world powers after reviewing the details, a senior adviser to Ahmadinejad said.

"We will review it and then decide about it," Ali Akbar Javanfekr told Reuters.

Javanfekr's comments came after U.S. Secretary of State Hillary Clinton said Wednesday that her country would be a "full participant" in talks by major powers with Iran over its nuclear program.

Clinton's announcement marked another significant shift from former U.S. President George W. Bush's policy toward a nation he labeled a member of the Axis of Evil.

On Wednesday, the State Department said the U.S. would be at the table from now on when senior diplomats from the five permanent members of the United Nations Security Council and Germany meet with Iranian officials to discuss the nuclear issue.

The Bush administration had generally shunned such meetings, although it attended one last year.

U.S. State Department spokesman Robert Wood said the decision to engage Iran was conveyed to representatives of Britain, China, France, Germany, Russia by the third-ranking U.S. diplomat William Burns at a Wednesday meeting in London.

That group, known as the P5+1, announced earlier that it would invite Iran to attend a new session aimed at breaking a deadlock in the talks.

"The U.S. remains committed to the P5+1 process; what is different is that the U.S. will join P5+1 discussions with Iran from now on," Wood said, adding that Washington was hopeful Iran would attend.

"If Iran accepts, we hope this will be the occasion to seriously engage Iran on how to break the logjam of recent years and work in a cooperative manner to resolve the outstanding international concerns about its nuclear program," he said.

Any breakthrough will be the result of the collective efforts of all the parties, including Iran.

Wood said the administration wants a diplomatic resolution to the nuclear issue and believes that requires a willingness to engage directly with each other on the basis of mutual respect and mutual interests.

"We hope that the government of Iran chooses to reciprocate," he added.

The invitation is to be sent to the Iranians by European Union foreign policy chief Javier Solana. In a statement the group said it welcomed the new direction of U.S. policy toward Iran. No time frame was given for a date of the meeting.