The talks, which began on Monday, mark the latest stage in a flurry of Western diplomacy in pursuit of a vote by the UN nuclear watchdog to refer Tehran to the Council for possible sanctions.
The move follows Iran's decision to restart its controversial nuclear research program.
American and EU officials say Iran has not proved that the program to develop fuel for civilian atomic energy is not being used as a cover for producing nuclear weapons.
So far Moscow, with a $1 billion stake building Iran's first atomic reactor, and Beijing, reliant on Iranian oil for its surging economy, have blocked any move to refer Iran by the International Atomic Energy Agency (IAEA) board of governors.
But Russia has warned Iran it could lose Moscow's support unless it suspended the fuel research it resumed last week.
China, however, said resorting to the Security Council might "complicate the issue", citing Iran's threat to hit back by
Iran says it will not submit to any
UN decision imposed on it
halting snap UN inspections of its atomic plants.
Russia and China are veto-wielding permanent members of the Council, along with the United States, Britain and France.
Diplomats said the London meeting of permanent Council members and Germany was aimed at reaching a consensus before an emergency IAEA board meeting the West wants next month.
"There's some confidence that Russia is increasingly leaning towards the EU3-US position and will not block referral," said
a diplomat with the three leading EU powers of Germany, France and Britain.
Last week the so-called EU3 called off talks with Iran saying they were effetively dead after Iran's decision to resume its research efforts.
"The crucial thing for us now is to gauge where Russia and China are on this matter"
"The crucial thing for us now is to gauge where Russia and China are on this matter," said another EU3 diplomat.
"It is a very fluid situation. Sanctions may be addressed briefly or in depth; it's hard to say at this stage."
British Foreign Secretary Jack Straw suggested Iran could rethink its course merely by being put in Security Council hands and that sanctions - unpalatable to many industrialised states that import Iranian oil and gas - might not prove necessary.
"The fact that Iran is so concerned not to see the matter referred ... I think underlines the strength of the authority of
that body," Straw said at a London conference on terrorism.
If the Western powers find Russia and China ready to back referral, Monday's talks could yield a date for an IAEA board
meeting well ahead of its next scheduled session on March 6.
US Undersecretary of State Robert Joseph, who oversees arms-control issues, was in Vienna for talks with IAEA director mohamed ElBaradei and other diplomats, a US spokesman said.
Iran says it is seeking atomic energy only to power its economy - the IAEA has unearthed no proof to the contrary - within its rights as a signatory to the nuclear Non-Proliferation Treaty.
But Iran's concealment of nuclear activities for almost 20 years until it was exposed by dissident exiles in 2002, a spotty record of cooperation with the IAEA since, and calls for wiping out Israel have fired Western resolve to rein it in.
ElBaradei told Newsweek magazine that it was not impossible the Islamic republic had a secret nuclear arms programme.
ElBaradei: Iran may be months
from having a weapon
"If they have the nuclear material and they have a parallel weaponisation program along the way, they are really not very far - a few months - from a weapon," he said.
"We still need to assure ourselves through access to documents, individuals (and) locations that we have seen all that we ought to see and that there is nothing fishy, if you like, about the programme," ElBaradei added.
Western officials say Iran crossed the "red line" last week by stripping IAEA seals from equipment that purifies uranium,
used for nuclear fuel, or if highly enriched, for bombs.
US Secretary of State Condoleezza Rice said Washington wanted the IAEA board to meet soon rather than wait until March, to deny Iran time to "obfuscate" further on the nuclear issue.
"There is some work to do because you would like there to be a strong consensus for a vote," she said during a visit to Liberia.
But OPEC giant Iran noted that any crackdown could drive up world oil prices, which would batter industrialised economies.
Iran is the world's fourth largest exporter of crude oil.
Tehran has also said only diplomacy, not threats of Security Council referral, could defuse its standoff with the West.