Iran and EU in new nuclear contact but no change

Iranian chief nuclear negotiator Saeed Jalili attends an official meeting with India's national security adviser M. K. Narayanan in Tehran July 1, 2008.

TEHRAN/BRUSSELS (Reuters) - Iran's chief atomic negotiator and the man representing six world powers discussed Tehran's nuclear program in telephone talks on Monday but an EU official said there was no change in the dispute.

Iran's National Security Council said negotiator Saeed Jalili and European Union foreign policy chief Javier Solana agreed to continue their talks.

"In this telephone conversation they voiced their satisfaction at the constructive trend of negotiations in Geneva and in subsequent contact. They described the trend of these negotiations as constructive," the council said in a statement faxed to Reuters.

However, an official in Solana's office gave a more downbeat account of the conversation, saying: "Nothing has changed. We stick to the two-track approach. The channels of communication remain open."

Asked what he meant by a two-track approach, the EU official said: "On the one side, pressure for sanctions in the United Nations Security Council, but also the offer of dialogue, for the Iranians to come to the table to discuss the package (of incentives) which has been proposed to them."

Iran's government spokesman said on Sunday the country would not change its nuclear stance in the face of new sanctions.

Tehran has rejected repeated U.N. Security Council demands that it suspend uranium enrichment, which the West suspects is intended to make bombs, and has also refused to freeze further expansion of the program in a pre-negotiating phase.

Iran, the world's fourth largest oil producer, insists its atomic effort is purely to generate electricity.

The United States, Russia, China, Britain, France and Germany presented a new package of incentives to Tehran last month, offering a freeze-for-freeze proposal in which they would hold off on further sanctions if Iran froze expansion of its nuclear work.

Western diplomats have acknowledged that it will take months of patient diplomatic effort to build consensus for a fourth round of U.N. sanctions after it took six months to negotiate the latest measures passed by the Security Council in March.

However, they said the United States and the European Union might move ahead with fresh measures to target the Iranian central bank and clamp down on investment in and exports to the oil and gas sector in the meantime.

(Reporting by Zahra Hosseinian in Tehran and Ingrid Melander in Brussels; Writing by Paul Taylor; Editing by Giles Elgood)