The two men entered a German government villa in Berlin at about 0840 GMT without making any comment, after holding five hours of discussions in the German capital Wednesday.

Although European powers have expressed some hope for a breakthrough, Iranian President Mahmoud Ahmadinejad said Wednesday that Tehran would "not back down" in the nuclear standoff in the face of Western pressure.

"They want to use suspension (of nuclear enrichment) for propaganda and tell the world that they forced Iran into accepting suspension," Ahmadinejad was quoted as saying by the official IRNA news agency.

"They are making a mistake and the Iranian nation will not back down on its rights."

European diplomats have tried to ratchet up the pressure by saying that time is running out for Iran to agree to UN Security Council demands to suspend uranium enrichment activities and thus avert possible United Nations sanctions.

Iran has defied the Security Council's August 31 deadline for it to stop uranium enrichment, which makes fuel for civilian nuclear power reactors but also in highly refined form the raw material for atomic weapons.

Iran insists its enrichment is solely for peaceful purposes.

The negotiations were given a fresh chance after Washington, under pressure from Europe and China, backed down on its demand for immediate sanctions against Iran for failing to meet the August deadline.

The deal offered by the five permanent Security Council members plus Germany calls on Iran to accept a package of incentives in exchange for it halting enrichment.

The success of the talks hinges on whether Iran is prepared to suspend uranium enrichment for a limited period of time before or even during full negotiations with world powers.

The Washington Times reported on Tuesday that the Islamic republic was close to agreeing a secret deal that would see it suspend enrichment for 90 days to allow it to hold further talks with European nations.

However there was confusion over whether Iran is considering such a step.

Mohammad Saeedi, the deputy head of Iran's atomic agency, denied the reports.

"Since no negotiations have started this news cannot be correct and it is utterly baseless and without foundation," Saeedi told AFP by telephone from Berlin on Wednesday.

"This kind of news will create a propaganda atmosphere and this false propaganda atmosphere will not help solve the issue."

European diplomats said Larijani made an offer at his last talks with Solana on September 9-10 in Vienna, but several Iranian officials have denied any suspension is on the cards.

Iranian Foreign Minister Manouchehr Mottaki said he was positive about the latest talks.

"Since there is an atmosphere of understanding between Iran and Europe, we can be optimistic on the results of the meeting," he was quoted as saying by state television.

The US State Department spokesman meanwhile spoke of "hopeful" signs from Iran but warned sanctions were still on tap if diplomacy failed.

The repeated delays for the latest Larijani-Solana meeting appear to reflect intense diplomatic efforts to ensure the nuclear dossier is not referred to the Security Council.

According to European diplomats, Western powers have set the start of October as a final deadline for Iran to give its definitive response to the Security Council offer.

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