Russian National Security Council chief Igor Ivanov, who was scheduled to arrive in Tehran late Saturday, was to hold talks with Iran's top nuclear negotiator Ali Larijani.

The semi-official Fars news agency said he would also meet the head of Iran's Atomic Energy Organization, Gholamreza Aghazadeh.

His trip follows a meeting this week of senior officials from Britain, France, China, Russia and the United States -- the five permanent UN Security Council members -- as well as Germany that failed to break an impasse on how to deal with Iran although progress was reported.

At their meeting in London, the major powers discussed a European proposal aimed at breaking Iran's determination to enrich uranium, a process which can be extended from making reactor fuel to nuclear weapons.

The EU proposal would combine technology, economic and other incentives for Iran with the threat of an arms embargo and other sanctions if the Islamic republic defied a UN injunction to halt enrichment.

Both Russia and China oppose talk of sanctions against Iran, which has consistently denied US claims that its nuclear programme is a cover for the development of atomic weapons.

Iranian President Mahmoud Ahmadinejad, in an interview with the Germany weekly Der Spiegel, urged Europe to "side with Iran" in the dispute or "suffer the consequences".

In the interview, due to be published Monday, Ahmadinejad also said the Europeans were "losing their reputation".

Tehran has rebuffed the EU proposal, repeating that its right to enrich uranium was not negotiable.

Meanwhile, the New York Times reported Saturday that the administration of President George W. Bush was beginning to debate whether to set aside a longstanding boycott of Iran and open direct talks to try to resolve the crisis.

Washington also said Friday it would still like to hold talks with Iran on the security situation in neighbouring Iraq, although Tehran has said it is not interested.

The United States severed relations with Iran after the 1979 Islamic revolution and the crisis over the seizure of American hostages and Bush in 2002 famously described Tehran as part of an "axis of evil".

Afghan President Hamid Karzai began a two-day trip to neighbouring Iran Saturday to meet leaders there and seek investment for his war-shattered nation.

But as he arrived, Iran angrily dismissed suggestions that Afghanistan, which has close ties with the United States, might play a mediating role in Tehran's nuclear standoff with the West.

As a signatory to the nuclear Non-Proliferation Treaty, Iran insists it has a right to uranium enrichment and has vowed not to go back on nuclear research and development.

However its ambassador to the United Nations, Javad Zarif, said Friday that Tehran was willing to accept a cap on its uranium enrichment capability to ensure the fuel produced is not used to develop nuclear weapons.

"This cap I think should be below 10, meaning reactor grade. Iran is prepared to put in place other measures to ensure fuel produced is not re-enriched and used for nuclear (weapons) purposes," Zarif said.

Early this month, Iran announced it had managed to enrich uranium up to 4.8 percent and said it had no plans to go beyond that level as this was sufficient for making nuclear fuel to generate electricity.

A process in the nuclear fuel cycle, uranium enrichment can also make the fissile core of an atom bomb when extended to levels of purity of more than 90 percent.

Russia, which is building Iran's first nuclear power plant at Bushehr on the southeast coast, said it would honour a contract to sell TOR-M1 surface-to-air missiles to Iran despite US calls to reconsider.

Defence Minister Sergei Ivanov said Friday that Russia would honour the deal "except in the case of some major event" adding that "world experience shows sanctions are not efficient".

Last year Russia offered to produce nuclear fuel on Iran's behalf in order to ease fears Iran would divert uranium into warheads. Talks broke down when Iran insisted uranium enrichment had to be carried out on its soil.

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