Top US, British, French and German officials huddled here Sunday to assess Iran's latest proposals for resolving their nuclear stand-off a day before a key meeting of the UN nuclear watchdog in Vienna on the crisis.
The meeting, on the sidelines of the UN General Assembly, brought together the US under secretary of state for political affairs, Nicholas Burns, and political directors of the so-called EU-3 countries negotiating with Tehran.
The officials were discussing their next move after Iranian President Mahmoud Ahmadinejad on Saturday unveiled proposals to allay Western concern about Tehran's nuclear arms ambitions, but stood firm on pursuing uranium conversion activities.
The speech outlined a series of proposals, including an offer to involve foreign firms in Iran's uranium-enrichment program.
But it increased tension with Washington and its European allies, which are debating whether to haul Tehran before the UN Security Council for possible sanctions for resuming sensitive work on nuclear fuel that could be used to build a bomb.
The issue will be discussed at a meeting of the International Atomic Energy Agency (IAEA) in Vienna opening Monday.
Ahmadinejad told the General Assembly that Iran would not only continue its uranium conversion work but had an "inalienable right to have access to a nuclear fuel cycle."
Ahmadinejad also suggested that South Africa join the negotiations to resolve the crisis over Tehran's nuclear program, noting Pretoria's active role in the IAEA's Board of Governors.
But Western countries expressed disappointment over the speech.
British Foreign Secretary Jack Straw described it as "disappointing and unhelpful", but nevertheless told the BBC that the crisis "will not be resolved by military means".
"What I heard today makes me say the option of referral... to the UN Security Council remains on the agenda," French Foreign Minister Philippe Douste-Blazy said.
A senior US State Department official said it was a "very aggressive speech", while Israel accused Iran of trying to "buy time to overcome their technical difficulties" in making weapons.
But Russian President Vladimir Putin said Iran was co-operating "sufficiently" with the IAEA.
UN sanctions would be "tough" and cause "more problems," Putin told Fox News television.
"Today the Iranian side is working sufficiently in co-operation with the IAEA. So let's proceed with the circumstances of today," Putin said.
The Russian leader said that during a meeting last week with Ahmadinejad in New York, "he assured me that the Iranian side wants to continue negotiations with the European three at least, and we are going to proceed from there."
Iran agreed to suspend sensitive uranium enrichment activities last November under the so-called Paris agreement, but Tehran resumed its fuel-cycle work in August after angrily rejecting the latest offer from the EU-3.
In Tehran, foreign ministry spokesman Hamid Reza Asefi warned of a "radicalisation" in the stand-off if the matter goes to the Security Council - something that Russia, China and members of the Non-Aligned Movement oppose.