Iran will not hesitate to make more highly enriched uranium itself if there is no deal at talks with major powers which have started in Vienna, an Iranian official has said.

Tehran won a reprieve from harsher UN sanctions by agreeing in principle at a high-level meeting in Geneva on October 1 to send low-enriched uranium abroad for further enrichment into fuel for a reactor that makes cancer-care isotopes.

Ali Shirzadian, a spokesman for Iran's atomic agency, said it was not "economically feasible" for Iran to further purify low-enriched uranium (LEU) itself to yield the 150-300 kg of material that it needs for its Tehran reactor, but that it would do so if the Vienna talks "do not bring about Iran's desired result".

The meeting in the Austrian capital between Iran, Russia, France, the United States and the UN's nuclear watchdog appeared to suffer a further blow later on Monday when Iranian state television reported that Tehran had refused to meet with the French delegation.

Tim Friend, Al Jazeera's correspondent in Vienna, described the announcement regarding France as "dramatic news".

Friend said: "According to Iranian state television, Iran says it's not prepared to sit down with the French delegation ... because it says France has failed to deliver nuclear materials in the past.

"It's difficult to see, if that is the case, how these talks can proceed. The mood here certainly isn't one of optimism, it's one of extreme caution."

Junior delegation

Monday's talks had been seen by Western diplomats as the first chance to build on the Geneva proposals for defusing tensions over Iran's nuclear programme.

"The talks this week are supposed to seal the deal," said a senior Western diplomat, who requested anonymity.

"But, since we have had no negotiations thus far with the Iranians, the next couple of days could reopen a lot of what we hoped was already agreed in principle."

Shirzadian told the official IRNA news agency that providing fuel for its Tehran reactor was "a good test to see whether the West is honest with Iran" and that Iran's programme to produce five-per-cent LEU would continue, whatever the outcome.

"We will never abandon our right [to enrich]," he said.

The meeting may also be clouded by Iranian allegations that the US and Britain backed fighters who killed 42 people, including six senior Revolutionary Guards commanders, in a suicide bombing on Sunday.

Resistant material

LEU is used as fuel for nuclear reactors, while a nuclear bomb requires highly-enriched uranium.

Iran won a reprieve from harsher UN sanctions during meetings in Geneva [EPA]

Western diplomats say Tehran must ultimately curb the programme to dispel fears of a growing LEU stockpile being highly enriched to produce nuclear weapons.

The Vienna talks are likely to run for two to three days and intended to finalise technical and legal aspects of the uranium proposal.

Western diplomats said Iran had signalled in Geneva that it was ready to ship about three-quarters of its declared stockpile of five-per-cent-enriched uranium to Russia for refinement to 19.7-per-cent purity, then to France for fabrication into fuel rods.

The material would replace the dwindling reactor fuel with material in a form that is resistant to higher enrichment.

For the powers, the deal's payoff lies in greatly reducing Iran's LEU reserve.

The stockpile has no apparent civilian use since Iran has no operating nuclear power plants, but is now enough to fuel one atomic bomb, if Tehran chose to enrich it to 90 per cent.

Western officials expect the deal to entail Iran sending out 1.2 tonnes of its LEU in one consignment before the end of 2009.