Speaking after official-level talks to prepare for formal negotiations in Geneva on Wednesday, a top Iranian official was blunt about the difficulties.

"We are at the most difficult part of the negotiation," said Hossein Moussavian after the closed-door Brussels talks. "(There) is a 50-50 percent chance of success (...) of reaching a compromise between the two sides. We have had some steps forwards, but we have a lot to go."

The 25-nation EU has warned that it could refer Iran to the UN Security Council -- and into Washington's diplomatic line of fire -- if the talks fail.

"Nobody wants a crisis on our side. We want the talks to continue," said one EU diplomat, ahead of Wednesday's Geneva negotiations led on the EU-side by the trio's foreign ministers plus EU foreign policy chief Javier Solana.

But even as the talks started Iran's Foreign Minister Kamal Kharazi renewed pressure on the European side by demanding that it come up with "positive" proposals.

"Iran is standing by its previous position and expects the Europeans to take positive measures," he was quoted as saying by the IRNA news agency. "We want to resolve the problem with an approach that guarantees our interests."

The so-called EU-3, representing the full 25-member EU, called the talks after a series of recent threats from Tehran to resume key nuclear activities, in breach of an accord to suspend them last November.

In contrast to the United States which suspects Tehran of wanting to build nuclear bombs, the EU-3 is seeking to engage the Islamic state, using a carrot of possible trade and other benefits to persuade it to curb its nuclear plans.

"Iran should be in no doubt that any such change to the suspension would be a clear breach of the Paris agreement" of last November, the EU-3 said in a letter to Iran's top negotiator Hassan Rowhani, calling for the talks.

"It would bring the negotiating process to an end. The consequences beyond could only be negative for Iran," added the letter, a copy of which was obtained by AFP.

Iran has warned bluntly that the talks are the "last chance" for the Europeans to offer it enough of an incentive to stop it resuming uranium enrichment activities, as threatened. Enriched uranium can be used for civilian as well as military purposes.

According to the Washington-based Carnegie Endowment for International Peace, Tehran is notably planning to partially resume activities at a plant in Ispahan, central Iran, followed by another site, Natanz.

In return Iran would pledge not to acquire nuclear arms and would authorize the permanent presence of IAEA inspectors at Ispahan and Natanz, according to documents obtained by the Carnegie Endowment and confirmed by Iranian sources.

The Iranians also want the EU to help them build nuclear reactors, and to guarantee them supplies of nuclear fuel for future reactors.

Speaking on the eve of the talks, British Foreign Secretary Jack Straw acknowledged that the meetings in Brussels and Geneva would be difficult -- but said he remained optimistic.

"The issue before us will be to ensure that both sides stick by the agreements which we have already entered into," said Straw. "I think (the talks) will be tough, but I think very much they will be successful."

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