Iran said on Monday it wanted to settle a decade-old nuclear dispute with the West that has raised fears of a new Middle East war, but the United States said it must back words with action.

New Iranian atomic energy chief Ali Akbar Salehi pledged greater cooperation with the U.N. nuclear watchdog, delivering a conciliatory message before talks this month about activities that the West suspects are aimed at developing a nuclear weapons capability.

Iran was also optimistic that broader negotiations with major powers could achieve a deal if the parties came with good intentions, Salehi told the annual meeting of the 159-nation International Atomic Energy Agency (IAEA).

"This time we are coming with a more full-fledged ... desire for this," he said.

Iran's new president, Hassan Rouhani, a relative moderate, has pledged to smooth relations with world powers to help ease stringent sanctions imposed on the Islamic Republic over its atomic activities.

Salehi said Rouhani's election and his appointments in nuclear diplomacy had created a "like-minded group" that would "facilitate the resolution" of the dispute if the other side was willing to do so.

The United States and Israel, believed to be the only nuclear-armed power in the Middle East, have not ruled out military action if diplomacy fails to curb Tehran's activities.

Salehi's comments, in a speech at the IAEA and to reporters, were in line with other signals coming from Iran since Rouhani succeeded hardliner Mahmoud Ahmadinejad as president.

But, like other Iranian officials, Salehi stressed that Iran would never "compromise" over what it sees as its inalienable right to a civilian nuclear energy programme. Iran says it is enriching uranium only for civilian energy and medicine.

HIGHER-GRADE ENRICHMENT

Salehi declined to say whether Iran would be willing to halt its higher-grade uranium enrichment, the part of its nuclear work that most worries the West as it is only a short technical step away from the production of weapons-grade material.

"These are issues that will be discussed during the negotiations," he told reporters.

In Moscow, Russia's foreign minister said Iran was ready to discuss this higher-level enrichment, to a fissile purity of 20 percent, in talks with the six world powers - Russia, the United States, China, France, Britain and Germany.

"This would be a very important step. It is of fundamental importance that the six powers react adequately to this potential agreement," Sergei Lavrov said.

No date has yet been set for a resumption of Iran's talks with the powers, but the issue may be discussed on the sidelines of this month's U.N. General Assembly meeting in New York.

Western diplomats say that, after years of stalling, words are not enough.

"The proof will be in the pudding," U.S. Energy Secretary Ernest Moniz, who headed the U.S. delegation at the IAEA meeting, told reporters. "The words have to be followed by concrete action."

In his speech, Moniz accused Iran of continuing to take "provocative actions that raise legitimate concerns" about its nuclear programme, an apparent reference to recent expansion of its uranium enrichment capacity.

Separately from the big power diplomacy, the IAEA has held 10 rounds of talks with Iran since 2012 in a so far fruitless bid to revive a blocked inquiry into its nuclear programme.

Western states see a meeting set for Sept. 27 in Vienna as a litmus test of any substantive shift.

"I have come here with a message of my newly elected president to further enhance and expand our ongoing cooperation with the agency," Salehi told the IAEA conference. – Reuters