Iran is prepared to pursue nuclear diplomacy with world powers before or after next month's presidential election in the Islamic Republic, its chief negotiator said on Thursday.

Saeed Jalili, who is also a candidate in the presidential race, was speaking after talks on the nuclear dispute with European Union foreign policy chief Catherine Ashton.

"We are ready to continue our talks with the (six powers) whenever they are ready, before or after the presidential election in Iran... Talks will take place soon," Jalili told a news conference in Istanbul, without giving a date.

Jalili's meeting with Ashton, who oversees talks with Iran on behalf of the United States, Russia, China, France, Britain and Germany, followed a failed round of big power diplomacy in April, in the Kazakh city of Almaty.

Jalili also reiterated that Iran would never abandon its right to enrich uranium. Major powers want Tehran to suspend its enrichment activities to reassure the world that it is not seeking nuclear weapons. Iran denies having any such goal.

"Even after the elections in Iran, the people of Iran will not allow their right to enrichment to be taken away," he said, adding that international sanctions on Iran should be lifted.

Any movement in the decade-old standoff will now probably have to wait until after Iranians vote on June 14 for a successor to President Mahmoud Ahmadinejad.

Jalili, who declared he would run on Saturday, is one of several conservative candidates known for loyalty to Supreme Leader Ayatollah Ali Khamenei, who decides nuclear policy.

Other declared challengers include pragmatic former President Akbar Hashemi Rafsanjani and Esfandiar Rahim Mashaie, who is close to Ahmadinejad, the outgoing president.

The final list of candidates will only emerge around May 23 when Iran's Guardian Council completes its vetting process.

The United States and Israel have not ruled out military action if diplomacy and tough trade and energy sanctions fail to induce Iran to suspend its sensitive nuclear work.

In the latest U.S. measure to try to choke off funding for the Iranian atomic programme, the U.S. Treasury blacklisted an exchange house and a trading company based in the United Arab Emirates on Wednesday, saying they had dealt with Iranian banks that Washington has declared off limits.

Tehran says its nuclear activity has only peaceful purposes and that it is Israel, widely believed to be the Middle East's only nuclear-armed power, that threatens peace and stability. – Reuters