"Of course this is definitely the expectation because otherwise, as I've said, this positive, constructive environment will be in jeopardy and this whole peace might collapse," Iranian ambassador Ali Asghar Soltanieh told AFP in an interview.

The UN watchdog International Atomic Energy Agency's (IAEA) deputy director general for safeguards Olli Heinonen will visit Tehran next week to draw up a plan to resolve "outstanding issues" in an over four-year-old IAEA investigation of Iran's nuclear programme, Soltanieh said.

IAEA chief Mohamed ElBaradei has said "drawing up a plan of action" should take 60 days and then implementation would begin on resolving questions about Iranian nuclear activities that could have military applications.

But there is pressure from Western nations for sanctions as Iran is defying UN Security Council resolutions for it to suspend uranium enrichment, which makes nuclear reactor fuel but also atom bomb material.

The Security Council has already imposed two sets of sanctions to back up these resolutions.

The United States and its European allies plan to propose a third sanctions resolution.

But China's UN ambassador Wang Guangya on Tuesday urged diplomatic efforts to end the nuclear standoff, saying the time was not yet right for new sanctions.

Russian President Vladimir Putin said Monday after meeting US President George W. Bush that Iran had displayed willingness to cooperate with IAEA inspectors.

A Western diplomat in Vienna said however that Iran's leaders have refused "to take simple steps to gain the world's confidence that their nuclear ambitions are peaceful" and needs to show "actions not just words."

Soltanieh said Iran was making a concession in holding new talks with the IAEA.

Iran had previously insisted that the Security Council abandon sanctions and let the atomic agency handle the Iranian issue alone.

"The main issue is that Iran has taken a big step accepting that we will have discussions with the IAEA about the modality of how to touch upon and deal with outstanding issues," he said.

"We hope that we get a positive, constructive mood and environment," he said.

"Hopefully, this is a new breakthrough ... and I hope that this will go in the right direction to the negotiated settlement of the whole issue," Soltanieh said.

He said Iran would not be discussing with the IAEA team in Tehran from Wednesday to Friday the issue of a "time-out" under which the Islamic Republic would limit its enrichment work and the UN would hold off on further sanctions.

ElBaradei has proposed such a "freeze-for-freeze" as a way to defuse the crisis and set the stage for multilateral talks.

Soltanieh said the matter would "probably" be discussed when EU foreign policy chief Javier Solana and Iranian nuclear negotiator Ali Larijani continue their meetings, the last of which was in Lisbon on June 23.

Iran has so far rejected any halt in its enrichment work, to which it claims a right in what it says is a peaceful effort to generate electricity, in accord with the nuclear Non-Proliferation Treaty.

The United States claims however that Iran is using this programme as a cover for the secret development of nuclear weapons.

The Security Council could toughen Iran sanctions, which now target people and institutions involved in its nuclear and missiles programmes, and impose travel bans, freezing of bank accounts and inspections of Iranian cargo ships and aircraft.

But Iranian President Mahmoud Ahmadinejad has brushed off the threat saying Saturday: "They cannot hurt us, not that they don't want to but because they are incapable of doing so as they are in a difficult situation."

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.