Iran and six world powers sought desperately Thursday to salvage something tangible from two days of talks that have revealed huge differences over how to resolve the crisis over Tehran's nuclear programme.

With signs that Iran has found little common ground with the P5+1 -- Britain, China, France, Russia and the United States plus Germany -- diplomats said they were striving at least to agree a venue and date to meet again.

The talks have already been extended by a day and on Thursday a planned news conference by EU foreign policy chief Catherine Ashton was abruptly called off, in order, officials said, to have more talks from 6:00 pm (1500 GMT).

The meeting in Baghdad saw the P5+1 offer a new package of proposals that included Iran suspending enrichment of uranium to 20-percent purities, for the P5+1 the most worrying part of Tehran's activity and the crunch issue.

The capability to enrich to 20 percent takes Iran significantly closer to being able to produce weapons-grade 90 percent, if it took the decision to build a nuclear bomb, by shortening the so-called "breakout" time.

But the P5+1 offer, made on the group's behalf by Ashton, alarmed Tehran since in return it does not offer the relief from crippling sanctions it is seeking.

An Iranian official had said Wednesday that the offer even put into doubt whether there was enough common ground to hold more in-depth talks getting to the nitty gritty of the issues, which was the main objective for the P5+1.

Iranian media said the chances of talks going into another round were "very low," with several outlets saying Iran had essentially been handed Israeli demands.

However, one diplomat said that new talks had been agreed but that it was "not yet" possible to say where and when it would be. An Iranian official, however, denied that an agreement on new talks had been struck.

The P5+1 reportedly proposed a pledge not to impose any new sanctions, as well as easing Iranian access to aircraft parts and a possible suspension of an EU insurance ban on ships carrying Iranian oil.

The proposals also reportedly included a revival of previous attempts to get Iran to ship abroad its stockpiles of enriched uranium in return for fuel for a reactor producing medical isotopes.

But Iran announced on Tuesday that it was loading domestically produced, 20-percent enriched uranium fuel into the reactor, and the Iranian official in Baghdad was dismissive of reviving the idea of a swap.

"There have been some areas of common ground and there has been a fair amount of disagreement," said a senior US official late Wednesday, portraying this as a sign that the negotiations at least were as serious as hoped.

"We have engaged in a lot of back and forth. Some of that has been difficult, but any negotiation that is worth its salt is difficult because you are getting down to the issues that matter.

"We are the beginning of this process. We are not in the middle of it and we are certainly not at the end of it."

Another diplomat said on Thursday that there was "clear distance between our positions. But that's what negotiations are for. At least both are getting a clearer sense of where the other side is."

On Wednesday, Iran made a five-step counter-proposal that an official said was "based on the principles of step-by-step and reciprocity" and that Iran's ISNA news agency called "comprehensive ... transparent and practical".

The Baghdad talks were always going to be tough, as to make progress the two sides would have to tackle some of the thorny issues that have divided them -- and the P5+1 themselves -- for years.

The cost of the talks failing could barely be higher. Iran is threatened with an EU oil embargo due to take full effect from July 1 that will also bar EU firms from insuring crude tankers heading to India, South Korea and Japan.

Israel, which is widely considered to have the Middle East's sole if undeclared nuclear arsenal, sees itself as Tehran's number-one target if Iran gets the bomb and is highly sceptical diplomacy can help it.

Like the United States, it has refused to rule out military strikes on Iran's nuclear facilities to prevent it developing a weapons capability.

Oil prices have risen higher as a result, hurting global growth just as the eurozone crisis threatens to return with a vengeance and as US President Barack Obama seeks re-election in November on the back of an improving economy.

Obama, who campaigned in 2008 for his first term promising to reach out to Tehran, is also wary of his Iran policy being branded a failure by his Republican challenger Mitt Romney.

Iran, world powers to meet in Moscow June 18-19: Ashton
Baghdad (AFP) May 24, 2012 - Iran and world powers agreed Thursday to hold a new round of nuclear talks in Moscow on June 18-19, EU foreign policy chief Catherine Ashton said after a tough two-day meeting in Baghdad.

"We will maintain intensive contacts with our Iranian counterparts to prepare a further meeting in Moscow with arrival on 17 June, with talks on 18th and 19th June," Ashton told a news conference.

"As we have already agreed, the talks will be based on a step-by-step approach and reciprocity. We remain determined to resolve this problem in the near term through negotiations, and will continue to make every effort to that end."

The announcement followed two long days of talks -- originally scheduled to be one day -- aimed at laying the groundwork to easing the crisis over Iran's nuclear programme.

Much of the international community suspects Iran's nuclear activity is aimed at developing atomic weapons. The Islamic republic denies this, and Tehran's lead nuclear negotiator later told the same news conference it has an "absolute right" to peaceful nuclear energy and uranium enrichment.

The talks followed a first session in Istanbul in mid-April, the first in 15 months, that found enough common ground to meet again in the Iraqi capital to tackle more substantive issues.

Ashton said the P5+1 powers "remain firm, clear and united in seeking a swift diplomatic resolution of the international community's concerns on the exclusively peaceful nature of Iran's nuclear programme."

"We expect Iran to take concrete and practical steps to urgently meet the concerns of the international community, to build confidence and to meet its international obligations," she said.

The Briton added that the powers had proposed at the talks "clear proposals to address the Iranian nuclear issue and, in particular, all aspects of 20-percent enrichment."

For the P5+1, this is the most worrying part of Tehran's activity and the crunch issue because the capability to enrich to 20 percent shortens the "breakout" time needed to enrich to 90-percent weapons grade.

"Iran declared its readiness to address the issue of 20 percent enrichment and came with its own five-point plan, including their assertion that we recognise their right to enrichment," Ashton said.

Her proposals reportedly included demanding a suspension of 20-percent enrichment but without the sanctions relief in return that Iran was pressing for. Ashton made no mention of sanctions in her statement.