Iran's top national security official Hassan Rowhani described the talks as "successful" despite the reported deadlock, the official Iranian news agency IRNA said.

Rowhani did not elaborate, but his comment comes on the back of warnings from other senior Iranian officials that the negotiations were in danger of grinding to a halt.

"Iran does not see nuclear technology as means for providing security. It is only regarded as substitute to oil and gas resources," Rowhani was quoted as saying. "We have to be self-sufficient in nuclear fuel."

"There is some very hard haggling going on," a senior European diplomat close to the talks in Geneva told AFP.

EU negotiators Britain, France and Germany want Iran to abandon enrichment as an "objective guarantee" that it is not developing nuclear weapons and are offering in return trade, security and technology rewards.

But Iran insists that its nuclear program is a peaceful effort to generate electricity, that it has a right to enrich uranium under the nuclear Non-Proliferation Treaty (NPT) and that it will eventually resume fuel cycle work.

The talks began in December after Iran had agreed the previous month to temporarily suspend uranium enrichment as a confidence-building measure. The current round, the fourth since December, opened Tuesday in Geneva.

But the United States says Iran is trying to covertly develop nuclear weapons and wants to bring Tehran before the United Nations Security Council for possible sanctions.

Washington is however preparing to back the European initiative. Diplomats say US cooperation is needed if Europe is to deliver on the trade and security benefits Iran seeks, which range from joining the World Trade Organization (WTO) to having American economic sanctions against the Islamic Republic lifted.

A second European diplomat said Britain, France and Germany have told the Iranians that if they insist on enriching uranium they should "put in place objective guarantees as good as their abandoning the fuel cycle and they haven't come back (to the Europeans) on that."

The diplomat said that while Iran had threatened to pull out of the talks and resume enrichment if rapid progress were not made on their receiving incentive benefits, the Europeans were content to have the negotiating process drag on.

"As long as we're talking, the Iranians are suspending their fuel cycle activities and that is good," the diplomat said.

A third European diplomat said the whole process may be in a state of limbo until after Iranian presidential elections in June decide whether pragmatists like former president Akbar Hashemi Rafsanjani or Revolutionary Guard hardliners take power.

"One side may be prepared to make a deal. Another side may want a bomb at all costs," the diplomat said.

Another European diplomat said the negotiations "certainly are tough but the Iranians will never make a concession even at the 11th hour. They will wait for the very last minute or seconds."

The United States meanwhile was defending its concern over Iran's nuclear program, with US Secretary of State Condoleezza Rice downplaying press reports that US intelligence on Iran was inadequate.

"I believe that there is enough evidence that there are problems with Iran's civilian nuclear power ambitions," Rice said Wednesday in a television interview.

US intelligence on Iran's suspected nuclear weapons program is insufficient for making firm judgments, a nine-member panel is expected to report confidentially to President George W. Bush by the end of this month, The New York Times reported Wednesday.

The United States invaded Iraq claiming Iraqi leader Saddam Hussein was hiding weapons of mass destruction but no such weapons were ever found.

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