Prior to the meeting, US Secretary of State Condoleezza Rice called on Iran to alter its stance of ignoring sanctions-backed UN demands to halt uranium enrichment work, but Tehran remained defiant.

It was Solana and Larijani's second meeting in just over a month after a fruitless head-to-head in Turkey in late April.

"There are basically two key points, one is the suspension of the enrichment activities and the other are the sanctions, which could also be put on hold," Solana spokeswoman Cristina Gallach said after the talks began.

"We will know more at the end of the day whether we have been able to advance," she said.

Speaking in Vienna, the headquarters of the International Atomic Energy Agency, Rice urged Tehran "to change tactics" and agree to suspend its enrichment work, which Washington charges is part of a covert nuclear weapons programme.

"The international community is united on what Iran should do and that is to suspend; to demonstrate that it is in fact not seeking a nuclear weapon under cover of civil nuclear power," Rice said.

She also repeated Washington's offer to join multiparty talks on trade, security and technological benefits for Iran if the Islamic state acceded to UN demands.

The Madrid meeting is the first between Solana and Larijani since the expiration of a 60-day time limit set by the United Nations for Iran to stop enriching uranium, a process which can be used both to make nuclear fuel and, in highly purified form, the fissile core of an atomic bomb

Iran denies it is seeking nuclear weapons, saying it wants only to produce energy for a growing population whose fossil fuels will eventually run out.

Observers said Thursday's meeting had little chance of achieving any breakthrough, with Tehran showing no sign of buckling under increasing international pressure.

"There is no possible path for the suspension of the enrichment of uranium," Iranian Foreign Ministry spokesman Mohammad Ali Hosseini said Thursday.

"Iran will use all legal and judicial means to realise its legitimate rights and will not halt its nuclear activities," Hosseini added.

And Larijani, speaking before flying to Madrid on Wednesday, had said that suspending enrichment was "not a logical way" to resolve the nuclear issue.

Foreign ministers from the Group of Eight most industrialised nations have said that they are prepared to back "appropriate measures" if Iran fails to compromise.

The US is leading calls by Western powers for existing sanctions on Iran to be tightened. The UN Security Council first imposed sanctions on Iran in December for rejecting its demands, and then modestly increased them in March.

The five permanent members of the UN Security Council -- China, Britain, France, Russia and the United States -- are growing increasingly frustrated and are determined to see the punitive measures strengthened, an analyst said.

"Iran would be deceiving itself to believe that they won't," said Mark Fitzpatrick, senior fellow for non-proliferation at the International Institute for Strategic Studies, a London think tank.

"They will give Iran a chance to come to the bargaining table with something to offer, but if Iran does not budge, additional sanctions will surely be imposed."

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.