By Fredrik Dahl and Justyna Pawlak
ISTANBUL (Reuters) - At their first meeting after a year of sanctions and saber-rattling over Iran's nuclear programme, negotiators from Tehran and six world powers said "constructive" talks on Saturday meant they would sit down again together next month.
A deal to reconvene in Baghdad on May 23 had been billed in advance by diplomats as a mark of a positive resumption and both Western and Russian negotiators at the talks in Turkey spoke of a more engaged tone from Iran, whose chief negotiator said he wanted to talk next about lifting Western sanctions on Tehran.
Washington made clear such a demand was premature, however. A senior U.S. official in Istanbul spoke of an "urgency ... for concrete progress" as the "window" for diplomacy was closing.
Over the past year, Israeli and U.S. warnings of military strikes if Iran does not stop working on some aspects of nuclear technology have stoked fears of war - and raised oil prices - in an unsettled Middle East. A resumption of the kind of prolonged dialogue spoken of by both sides could help dampen anxieties.
"We expect that subsequent meetings will lead to concrete steps towards a comprehensive negotiated solution which restores international confidence in the exclusively peaceful nature of the Iranian nuclear programme," said Catherine Ashton, the EU foreign policy chief who leads negotiations for the six powers.
The group comprises the five permanent members of the U.N. Security Council - Russia, the United States, China, France and Britain - along with Germany. It is known as the P5+1.
Calling Saturday's talks "constructive and useful", Ashton said: "We want now to move to a sustained process of dialogue."
The meeting in Baghdad, a rare friendly venue for Iranians in the Arab world, would be part of a "step-by-step" approach. Junior officials would meet again before May 23, she added.
Chief Iranian negotiator Saeed Jalili, however, made clear that Iran had no intention of stopping its plants that enrich uranium to contain 20 percent of fissile material - much higher than the quality needed to generate electricity, but which Tehran says is for medical and other uses, not for warheads.
Nonetheless, however remote a final accord may be between the Islamic republic and its adversaries, a return to the negotiating table may calm nerves after 15 angry months.
In that time, the West has imposed crippling, new economic sanctions while Iran, watching its key regional ally Syria collapse into internal strife, has threatened to blockade oil tankers. And Israel, fearful a nuclear Iran would jeopardize its very survival, has planned for possible "pre-emptive" strikes.
One diplomat from the six said Iran's willingness to at least discuss its nuclear programme marked a shift away from the stalemate which marked previous meetings early last year: "We spent the whole day discussing the nuclear issue."
Before, when Westerners raised allegations of a secret weapons programme, "they would have walked away", the envoy said, adding negotiators were not "overly optimistic" but saying: "There is a seriousness to discuss the nuclear issue."
IRAN SEES PROGRESS
The negotiators for Iran, where the clerical leadership's defiant defense of a right to nuclear energy has proven one of its more popular policies, said they were keen to talk further.
"We witnessed progress. There were differences of opinion," chief negotiator Jalili said. "But the points we agreed on were important." Asking for talks to include the lifting of sanctions that have begun to add to widespread hardship in the energy-rich nation, he said: "The next talks should be based on confidence-building measures which would build the confidence of Iranians."
His defense of 20-percent enrichment did not impress the United States or others who question the justification and say that that level of enrichment makes a "break out" to weapons-grade material much easier and could give Iran the possibility, if it wanted, to build a nuclear bomb in a year or two.
Referring to Iran's rights under the Non-Proliferation Treaty (NPT) on nuclear weapons, Jalili told a news conference:
"Enrichment of uranium is one of these rights that every individual member state should benefit from and enjoy for peaceful purposes." Western governments argue Iran has broken the NPT by conducting secret research on nuclear weapons.
While there was little new heard in Istanbul on the substance of the disputes, the resumption of a process, which its adversaries hope might let Iran's leaders perform a face-saving climbdown and also may stay Israel's hand, was seen by observers as favoring the chances of a peaceful outcome.
"Today's round of P5+1 talks with Iran in Istanbul established a positive foundation for progress on the nuclear question. The talks exceeded initial expectations," said Daryl Kimball of the Arms Control Association, a Washington-based research and advocacy group.
"The further high-level and technical talks announced today are the logical next step to reach agreement on specific, concrete steps that can help prevent a nuclear-armed Iran."
WEST WANTS ACTION
Foreign Secretary William Hague said Britain wanted peace:
"Today's talks were a first step towards that objective, but there is still a long way to go," he said. "We now need agreement on urgent, practical steps to build confidence around the world that Iran will implement its international obligations and does not intend to build a nuclear weapon."
Echoing comments by other diplomats, a senior U.S. official said the atmosphere had been positive but added: "Now we have to get down to the hard work.
"The international community expects them to take action."
As for Jalili's request for relief from sanctions, the U.S. official said Washington still expected a European Union oil embargo take effect on July 1 and that other measures would continue: "Dialogue is not sufficient for any sanctions relief. One has to get to get to concrete actions that are significant."
Deputy Foreign Minister Sergei Ryabkov, who is leading the Russian delegation, told Interfax news agency: "The atmosphere is constructive, the conversation is businesslike."
For supporters of sanctions, the change in approach from Tehran, which began to discuss renewing negotiations late last year, may be a vindication of the punishment imposed.
"Given that oil revenue accounts for over half of government income, the budget will be under significant strain this year as oil exports fall as a result of sanctions and oil production is cut back by Iran as its pool of buyers begins to shrink," said Dubai-based independent analyst Mohammed Shakeel.
Western officials have made clear their immediate priority is to persuade Tehran to cease the higher-grade uranium enrichment it began in 2010. It has since expanded that work, shortening the time it would need for any weapons "break-out".
Iran has signaled some flexibility over limiting its uranium enrichment to a fissile purity of 20 percent - compared with the 5 percent level required for nuclear power plants - but has suggested it is not ready to do so yet.
(Additional reporting by Jonathon Burch and Alexandra Hudson in Istanbul, Zahra Hosseinian in Zurich, Marcus George in Dubai and Maria Golovnina and Avril Ormsby in London; Writing by Alastair Macdonald)