Washington wants the United Nations to crack down on Iran with sanctions for its refusal to suspend enrichment, which makes nuclear reactor fuel but also atom bomb material, despite being offered trade and other benefits in return.

"We had some good and constructive talks, we made some progress in some areas and we shall continue tomorrow," Larijani told reporters, after meeting EU foreign policy chief Javier Solana for over three hours Saturday evening.

"We discussed different issues, somehow enshrined within the package proposed by the European side and also the response which was given by Iran," Larijani added after the meeting, referring to the incentive benefits being offered by Britain, China, France, Germany, Russia and the United States.

Solana's spokeswoman Cristina Gallach said "the talks have been positive and constructive."

The United States wants a UN Security Council resolution imposing sanctions to be drafted as early as next week, and the six world powers are to hold a telephone conference call on Monday, US Undersecretary of State Nicholas Burns said Friday in Berlin.

The goal is to be ready so that foreign ministers from the six nations trying to win guarantees that Iran will not develop nuclear weapons can "complete a sanctions resolution" when they meet in New York at the UN General Assembly" on September 19, Burns said.

Iran has failed to heed a Council resolution that called for an enrichment freeze by August 31 and threatened sanctions if Tehran did not comply.

A diplomat said the six world powers would be watching the Larijani-Solana meeting to see if there was hope of moving towards negotiations rather than sanctions.

There seem to be differences among the six, however, over taking punitive action.

Prime Minister Wen Jiabao of China warned Saturday against stepping up pressure on Tehran.

"To mount pressure or to take sanctions will not necessarily bring about a peaceful solution," Wen told a news conference in Helsinki after an EU-China summit there.

Russia, like China a key trading partner with Iran, is also reluctant to impose sanctions.

And European countries such as Germany, France and Italy fear damage to their considerable trade with Iran if strong economic measures are imposed.

A senior European diplomat told AFP: "The United States is trying hard to get sanctions. Others are trying to put their foot on the brakes."

But the diplomat said the six did agree that they must remain united in order to be able to pressure Iran.

Other diplomats noted that the application of sanctions is expected to be gradual, with symbolic measures such as banning travel by Iranian nuclear officials coming first.

Non-proliferation analyst Gary Samore, a former US Clinton administration official who now works at the Council on Foreign Relations think tank in New York, said the Russians and Chinese, and even some European countries, may be open to a compromise for starting talks under which Iran would not have to totally suspend enrichment.

"The idea that the Iranians have been floating behind the scenes is for technical level discussions at the political director level without suspension to prepare for full discussions at the foreign ministry level," Samore said.

But Burns in Berlin had ruled out any compromise on enrichment and said the six nations were holding to the agreement they struck in June that Iran must freeze the sensitive fuel work in order to start talks or face UN sanctions.

Iran says its nuclear program is a peaceful effort to generate electricity and insists on its right to enrich uranium under the nuclear Non-Proliferation Treaty.

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