"I think we have made positive steps. Iran has proposed a global plan to settle this issue," Khatami told a press conference following 90 minutes of talks with his French counterpart Jacques Chirac at the Elysee palace.

"The European reaction, particularly that of France, has been very open."

"I hope that during the next meeting on April 29, thanks to French support but also to the reception given to this global plan, we will be able to make even more significant headway," he noted. "We are today closer to a solution than some time ago."

Talks remain deadlocked over Iran's insistence that it maintain the right to make its own nuclear fuel. There are widespread fears that the technology could be used to produce highly enriched uranium for a nuclear bomb.

The European Union is currently considering, ahead of a meeting next week with Iranian negotiators in Geneva, a proposal by Tehran to allow it to produce low enriched uranium, and on a small scale.

The meeting in Geneva will be of experts from the two sides, while the meeting on April 29, which could be in London, will be at a higher level of foreign ministry political directors to review progress in the EU-Iran talks, which began in December, diplomats said.

Iran made the proposal to be allowed to run a pilot centrifuge project for uranium enrichment at a meeting in Paris last month with EU negotiators Britain, France and Germany, according to a European official who asked not to be named.

The pilot plant would have a relatively small number of centrifuges, the machines arranged successively in order to refine out enriched uranium.

Earlier Khatami told the French daily Le Figaro that his country could not agree to give up the peaceful use of atomic power and retained the right to resume "nuclear activities."

"We are ready to consider any reasonable solution, but we reject the definitive suspension of our activities," he told Le Figaro at the start of a 24-hour visit to Paris.

Iran is negotiating with Britain, France and Germany to win trade, security and technology rewards in return for giving guarantees that it is not trying to develop nuclear weapons.

Khatami, a moderate who is expected to leave power in June, had earlier addressed a conference at the United Nations Educational, Scientific and Cultural Organization (UNESCO).

More than a thousand demonstrators, according to police, took to the streets of Paris to protest Khatami's visit, many shouting "Shame on France" and accusing Tehran of human rights abuses and denouncing its nuclear program.

Iranian Foreign Minister Kamal Kharazi meanwhile held a meeting with his French counterpart Michel Barnier on the nuclear issue. A French spokesman described it as "constructive."

The United States is threatening to take Iran to the United Nations Security Council if it fails to abandon for good its programme of uranium enrichment -- the process which makes fuel for civilian reactors but also what can be the explosive core of atomic bombs.

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