UPDATE 3-Iran, powers agree to meet again in nuclear dispute

* Geneva talks end, new meeting planned by end-January

* Ashton says Istanbul meeting to address core concerns

* Iran showing no sign of backing down in dispute

(Adds comments by EU official)

By David Brunnstrom and Parisa Hafezi

GENEVA, Dec 7 (Reuters) - Major powers and Iran agreed on Tuesday to meet again next month, as much progress as either side expected in talks aimed at breaking the deadlock over the Islamic Republic's disputed nuclear programme.

Underlining how far apart the two sides remain, President Mahmoud Ahmadinejad said negotiations could work if sanctions imposed on Iran over its nuclear activities were scrapped. The big powers want to see progress before sanctions can be lifted.

European Union foreign policy chief Catherine Ashton said Iran and the six powers involved in efforts to find a diplomatic solution to the row would meet again in Istanbul in late January to address basic concerns about Iran's nuclear programme.

But Iran's chief nuclear negotiator, Saeed Jalili, said Tehran would not negotiate under pressure.

Ashton told a news conference: "We and Iran agreed to a continuation of these talks in late January in Istanbul where we plan to discuss practical ideas and ways of cooperating towards resolution of our core concerns about the nuclear issue."

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The EU is coordinating negotiations with Iran on its nuclear programme on behalf of the six powers -- the United States, Russia, China, Britain, France and Germany.

Ashton said the powers were united in seeking a resolution of international concerns about Iran's nuclear activities.

At the two-day talks, the powers sought to put concerted pressure on Iran to agree to discuss its nuclear work, which the West suspects is aimed at making bombs.

"I wouldn't describe the talks we've had today as fruitful, but it's a start," said an EU official. "A problem like this is not going to be solved in two days; it's not an easy problem."

"Given the history you can't be optimistic, but there's no point in doing these things with the objective of failure," the official said. "The problem is that the level of trust is about as low as it could get anywhere outside of North Korea."

Iran made clear again it would not back down in the dispute, which has the potential to spark a military conflict in the Middle East with dire consequences for the world.

"We will not talk about Iran's nuclear rights and Iran will never accept pressure," Iranian chief nuclear negotiator Saeed Jalili told Iranian state television.

"Only dictators try to dictate issues and their will to other countries ... Iran will not hold talks if the pressure continues," he said.

SANCTIONS PRESSURE

In a speech in Iran, Ahmadinejad called on the powers to publicly declare Iran's national "rights", saying they would have "nothing but remorse" if they failed to do so.

Western powers want the Iran to ultimately agree to curb its nuclear enrichment activities, which can have both peaceful and military purposes, but Tehran has repeatedly refused to do this.

Iran insists its nuclear programme is designed to produce electricity so it can export more of its bountiful oil.

The six powers had played down expectations of progress at the talks in Geneva, the first in over a year, but they hoped that they would lead to a regular contacts.

Iran, which announced a breakthrough in its nuclear technology on the eve of the talks, has been under increasing pressure from sanctions imposed by the West.

Iran dismisses the impact of such penalties, saying trade and other sanctions imposed since the 1979 Islamic revolution toppled the U.S.-backed shah have made the country stronger.

Such rhetoric is to be expected from Tehran, but experts and diplomats are far from confident that external pressure alone will be enough to force Tehran to climb down, with some suggesting the big powers may also have to compromise. (Additional reporting by Ramin Mostafavi and Robin Pomeroy in Tehran, Stephanie Nebehay in Geneva and Fredrik Dahl in Vienna; Writing by Jonathan Lynn and Fredrik Dahl; Editing by Jon Hemming)