Iran has no interest in reviving a failed nuclear fuel swap deal with Western powers, but might scale back production of higher-grade enriched uranium once it has the material it needs, the head of the country's atomic energy organisation said.      

US officials say that getting Iran to suspend high-level uranium enrichment and close an underground nuclear facility near the holy city of Qom are priorities for talks between Iran and world powers that are due to resume on Saturday.     

Iranian media also quoted Foreign Minister Ali Akbar Salehi on Monday as saying that Tehran would not agree to world powers imposing pre-conditions before the nuclear talks which will resume in Istanbul after collapsing more than a year ago.     

'Setting conditions before the meeting means drawing conclusions, which is completely meaningless and none of the parties will accept conditions set before the talks,' the Iranian parliamentary news agency quoted him as saying.     

The United States and its allies suspect Iran's nuclear programme is hiding attempts to develop an atomic weapons capability and Washington has not ruled out military action against Tehran if diplomacy fails.     

Iran says the programme is solely for power generation and medical needs, adding that it needs to enrich uranium to 20 percent to produce medical isotopes from a Tehran Research Reactor for the treatment of thousands of patients.     

Iranian media on Monday quoted nuclear chief Fereydoon Abbasi-Davani as dismissing a revival of the swap deal to supply Iran with fuel enriched abroad for peaceful purposes at a Tehran research reactor but which collapsed in 2009.     

'The Islamic Republic won't turn back and has no interest in receiving 20 per cent fuel from other countries because it has made an investment,' Abbasi-Davani said during a Sunday night television interview, the Iranian state news agency reported.       

'We made the investment because they (Western powers) blocked us. If they had given us fuel, there would be no problem and our (Tehran) reactor would have been working,' Abbas-Davani added.     

Iran started enriching uranium to 20 per cent purity in early 2010 to refresh the dwindling fuel stock at a Tehran research reactor. Tehran has repeatedly said it had no other choice after the swap deal failed to secure uranium to keep the reactor running.      

However, Abbasi-Davani raised the possibility of converting fuel back to 3.5 per cent purity, the level of enrichment required for reactors producing nuclear power.     

'Once the necessary fuel is obtained, we will scale back production and maybe even convert it to 3.5 per cent,' he said.     

Trying to find a way to halt Iran's higher-grade uranium enrichment capability has become the focus for Washington and its allies who believe Tehran is developing all means and components required for a nuclear bomb in isolation.     

Crude oil prices slipped on Monday following news that the talks would resume between Iran and the P5+1 countries - the United States, Britain, France, Russia, China and Germany. Brent crude futures were $1 a barrel lower.      

Western experts say Iran has enough 3.5 and 20 per cent-enriched uranium for around four bombs if the material is refined to more than 90-per cent purity. While Iran has refused to suspend its enrichment activities it has at times appeared more flexible regarding 20 per cent enrichment.     

It is unclear what it would expect in return, but its demands would revolve around the lifting of sanctions against its financial and energy sectors which have caused increasing financial hardship within the country.     

On Sunday, Israeli defence minister Ehud Barak also emphasised that the key to successful talks would be on the basis of Iran halting enrichment to 20 percent.     

Later Israeli Prime Minister Benjamin Netanyahu went further, saying the P5+1 representatives to the talks should demand an end to all enrichment activity, the transfer of all enriched material out of Iran and the closure of the nuclear facility near Qom. – Reuters