World powers urge Iran to suspend nuclear enrichment during talks

World powers want Iran to suspend nuclear enrichment during talks on a package of incentives aimed at resolving a dispute over Tehran's atomic ambitions, EU foreign policy chief Javier Solana said on Saturday.

"We continue to ask for suspension, suspension during the time of negotiations and we will [then] see the outcome of negotiations," said Solana after presenting the package of trade and other benefits offered to Iran by world powers.

Iran has repeatedly ruled out halting nuclear enrichment, which can have both civilian and military uses, but says it is ready to engage in negotiations with world powers.

A senior Iranian official earlier on Saturday said that talks between Iranian officials and Solana opened "a new diplomatic path" in efforts to resolve a long-running nuclear dispute.

"Both sides have reached a preliminary agreement on common points in the two packages," the official said, referring to separate proposals put forward by the two sides.

This will common ground will be the basis for fresh nuclear talks, the official, who declined to be named, told Reuters.

U.S. President George W. Bush also on Saturday said he was disappointed that Iran rejected any suspension of nuclear enrichment, after the EU's top diplomat handed Tehran a world powers' offer of economic benefits to try and persuade it to stop such work.

Although Iran has stopped short of official rejection of the offer, Bush said: "I am disappointed that the Iranian leaders rejected this generous offer out of hand."

Bush told a joint news conference with French President Nicolas Sarkozy this was a sign that Iran's leadership was willing to isolate its people further.

Solana on Saturday handed Iran an offer of trade and other benefits from world powers if it suspends nuclear enrichment, which the Islamic Republic has repeatedly refused to do.

Shortly thereafter, Iranian government spokesman Gholamhossein Elham told reporters, "If the package [from six major powers] includes suspension it is not debatable at all."

"Iran's view is clear: any precondition is unacceptable," he continued.

Solana arrived in Tehran late on Friday to present an incentives package agreed by the United States, China, Russia, France, Britain and Germany in the latest bid to end a deepening dispute over Tehran's atomic ambitions.

Solana's spokeswoman said he presented the offer to Iranian Foreign Minister Manouchehr Mottaki in Tehran.

The offer, including civilian nuclear cooperation, is a revised version of one rejected by Iran two years ago.

The world's fourth-largest oil producer has ruled out halting a nuclear program it says is for generating electricity but which Western powers suspect is aimed at making bombs.

Seeking to step up the pressure, the United States and the 27-nation EU have threatened more sanctions if Tehran does not stop enriching uranium, which has both civilian and military uses.

Solana says he hopes the incentives package will start a new process for resolving the long-running standoff, which has helped push up crude prices to record highs, but has also played down the prospect for a breakthrough.

Solana, who has said he expects no "miracles", said the proposals would support Iran in developing a modern nuclear energy program and also covered political and economic ties.

"I am traveling to Tehran to present a generous and comprehensive offer," he said in a statement.

"I am convinced that it is possible to change the present state of affairs," Solana said. "Our proposal is good for the future of Iran and for the future of the Iranian people."

The United States, which is leading efforts to isolate Iran over its nuclear ambitions, says it wants to resolve the dispute diplomatically but has not ruled out military action.

The incentives package, hammered out by the six major powers in May, is an updated and enhanced version of an offer spurned by Iran in 2006, which also included wider trade in civil aircraft, energy, high technology and agriculture.

Iran's refusal to stop enrichment, which can provide fuel for power plants or material for bombs if refined much more, has drawn three rounds of UN sanctions against the country since 2006.

Solana was accompanied by senior officials from the major powers with the exception of the United States, which cut ties with Iran after its 1979 Islamic revolution.

On a farewell tour of Europe this week, U.S. President George W. Bush said a nuclear-armed Iran would be "incredibly dangerous for world peace" and that "all options are on the table", alluding to military action as a last resort.

Concern in the oil market that Tehran's nuclear dispute with the West may lead to a disruption in its crude exports have helped drive oil to record levels near $140 a barrel, hurting the United States and other consumer nations.

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	Iran's Foreign Minister Manouchehr Mottaki (L) welcomes EU foreign policy chief Javier Solana in Tehran on Saturday. (Reuters)