"Sanctions cannot dissuade us and will not have any effect," foreign ministry spokesman Mohammad Ali Hosseini told reporters.

His comments came after talks between Iran's top nuclear negotiator Ali Larijani and European Union foreign policy chief Javier Solana on Thursday ended with positive words from both sides but no sign of any breakthrough.

Hosseini emphasised that Iran was not offering any concession on the EU's key demand that Tehran suspend uranium enrichment, a process that can be used to make nuclear fuel but also the explosive core of an atomic bomb.

"Suspension was not discussed. No change in our policy in this regard has happened," said Hosseini.

US officials expressed frustration after the talks, saying there was no sign of Iran offering any suspension and the only option was for the UN Security Council to discuss a third set of sanctions against Tehran.

"Iran unfortunately hasn't changed its views," State Department deputy spokesman Tom Casey said.

"That unfortunately means, I think, that where we wind up going is continuing down the negative pathway of sanctions," he added.

US Secretary of State Condoleeza Rice also expressed scepticism about the talks, saying that the "only question" was whether Iran was prepared to suspend uranium enrichment.

The UN Security Council has already agreed two sets of sanctions against Iran for ignorning its calls to suspend enrichment, and Western powers are now openly talking of a new resolution after Iran missed the latest deadline.

Hosseini said that a "number of ideas" had been discussed in the talks between Larijani and Solana, and these would be taken up at an upcoming lower-level meeting between "experts" from both sides.

The United States accuses Iran of seeking nuclear weapons, a charge vehemently denied by Tehran which says it wants only to generate energy for a growing population when fossil fuels eventually run out.

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