However after similar meetings between Iran's Ali Larijani and the European Union's Javier Solana on April 26 in Ankara and May 31 in Madrid ended without any signs of a breakthrough, hopes are low of any significant progress.

A huge gap apparently remains between the two sides over uranium enrichment, a sensitive process that can be used both to make nuclear fuel and the explosive core of an atomic bomb.

The European Union and the United States say they will only hold full negotiations with Iran over its nuclear programme if Tehran suspends enrichment immediately.

Iranian leaders however have repeated time and again that they have no intention of offering any suspension of the sensitive process and are prepared to continue defying the West.

"Nuclear energy belongs to the Iranian nation and the Iranian nation will defend this right with their fists in the air," President Mahmoud Ahmadinejad told cheering crowds at a public rally last week.

Ahmadinejad also dismissed the prospect of a third set of UN sanctions to punish Iran for its defiance, retorting that the two previous sets of resolutions were "not worth a nickel coin".

Both Solana and Larijani's office have confirmed that the meeting will take place on Saturday in the Portuguese capital but have given no details on the agenda.

A day before his meeting with Solana, Larijani will stop over in Vienna on Friday for talks with the head of the UN atomic watchdog, Mohamed ElBaradei.

But Iran's representative to the International Atomic Energy Agency (IAEA), Ali Asghar Soltanieh, said there was no chance of any talks on UN Security Council resolutions which demand Iran suspend enrichment.

"Of course it will be about the nuclear issues we have vis-a-vis the IAEA," Soltanieh told AFP. "It will not be about the UN resolutions. We always said that the UN resolutions are without legal basis."

Western powers are now pushing for a third UN sanctions resolution against the Islamic republic, but it remains to be seen how quickly veto-wielding members Russia and China can be brought on board.

The United States has said it wants to have the crisis resolved through diplomacy but has never ruled out the option of military action to bring Iran to heel.

"My position hasn't changed and that is that all options are on the table," US President George W. Bush said this week.

Instead of yielding to the UN demands, Iran has in fact expanded its capacity for enriching uranium at a facility underground at its nuclear plant in the central city of Natanz.

Diplomats in Vienna have said the UN atomic agency thinks Iran could have 8,000 uranium-enriching centrifuges at the facility by December, a significant increase in capacity.

According to IAEA figures, Iran had as of May 13 more than 1,300 centrifuges at the heavily bunkered facility in Natanz.

However analysts have raised questions over whether Iran is yet able to operate the centrifuges at the high velocities and long period of time necessary to produce substantial quantities of enriched uranium.

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