Iran accused world powers on Thursday of creating 'a difficult atmosphere' that hindered talks on its atomic energy programme, signalling a snag in diplomacy to defuse fears of a covert Iranian bid to develop nuclear bombs.

The nub of the dispute was not immediately clear as the high-stakes talks went into a second day in the Iraqi capital Baghdad. But Iran had served notice that it wanted immediate relief from economic sanctions as part of any deal to scale back uranium enrichment, whereas Western powers insisted Tehran must first rein in its activity.

Pro-government Iranian media said Tehran's negotiators were demanding a principle of 'reciprocity' of concessions, which they said was not on the table in the Baghdad talks. 

The US had voiced cautious hope on Wednesday that Iran was finally engaging the powers on practical, transparent ways of showing its nuclear work, marked by years of secrecy and evasions of UN inspections, would be for peaceful ends only.

European Union foreign policy chief Catherine Ashton, heading the powers' delegation in Baghdad, met her Iranian counterpart Saeed Jalili on Thursday before the full plenary session commenced, a Western diplomat said.

But an Iranian delegate poured cold water on suggestions that progress towards an outline deal, seen as crucial to heading off the danger of a new Middle East war, was being made.

'What we heard in Istanbul was more interesting,' he said, referring to exploratory talks that ended a 15-month diplomatic deep freeze during which the West escalated sanctions to target Iran's oil exports. 'We believe the reason (the powers) are not able to reach a result is America,' the official said, asking not to be named.
'(They) came to Baghdad without a clear mandate so we think the atmosphere is difficult.'     

A senior US official said earlier the six powers had put specific gestures to lessen sanctions pressure on the table as part of a step-by-step confidence-building process.

A Western diplomat said that one element of the offer was an easing of restrictions to exports of aircraft parts to Iran - a relatively modest step unlikely to unblock the broader standoff.     

After the Iranian criticism, another diplomat at the talks said none of the six powers - the United States, Russia, China, France, Britain and Germany - were ''rolling back' on anything.

'By coming to Baghdad and putting on the table a forward-looking package, we are being pro-active, engaging and building on Istanbul. Any negotiation on an issue like this is never going to be straightforward, but it's far too early to give a clear read-out of how things are progressing.' - Reuters