Iran and the European Union are to meet in Brussels on Monday for the start of negotiations on a long-term deal in which Iran would get peaceful nuclear technology, trade benefits and regional security help in return for suspending uranium enrichment, the key part of the nuclear fuel cycle.
However, foreign ministry spokesman Hamid Reza Asefi said on Sunday his country was looking at only a limited halt to nuclear development.
"The permanent suspension of enrichment is not on our agenda," he said. "A short-term freeze is what we are stressing."
Meanwhile, a US newspaper has reported that US President George Bush's administration has listened in on phone calls between Muhammad al-Baradai and Iranian diplomats, seeking ammunition to oust al-Baradai as head of the UN nuclear watchdog agency.
"The intercepted calls have not produced any evidence of nefarious conduct by al-Baradai," the Washington Post said on Sunday, quoting three unnamed US officials who had read the transcripts.
"Some people think he sounds way too soft on the Iranians, but that's about it," one official was quoted as saying.
The US says al-Baradai's handling
of Iran is too lenient
The United States wants the UN International Atomic Energy
Agency (IAEA), which al- Baradai heads, to report Iran to the UN Security Council for possible sanctions over what Washington says is a covert nuclear weapons programme.
But al-Baradai says the jury is still out on whether Tehran's programme is peaceful or not.
The Egyptian diplomat, 62, also earned the ire of Washington by questioning US intelligence on Iraq. The Bush administration opposes his winning a third term in 2005 as IAEA chief.
The official US position is that heads of international organisations should not serve more than two terms, as al-Baradai will have done by next year.