Iran raised the stakes on Sunday when it revealed that it had mined and produced its first home-grown batch of uranium yellowcake -- the raw material for enrichment -- instead of seeking to import new supplies.

That triggered statements of concern in Washington and Europe ahead of the the meeting in Geneva between the European Union's top diplomat, Catherine Ashton, and Iran's chief negotiator, Saeed Jalili.

The talks are tentatively scheduled to resume on Tuesday morning.

Ashton will act on behalf of the five UN Security Council permanent members -- Britain, China, France, Russia and the United States -- plus Germany, accompanied by senior officials from those countries, diplomats said.

Iran denies seeking nuclear weapons, but has continued enriching uranium in defiance of repeated UN Security Council sanctions imposed since 2006 to prevent it acquiring the technology and raw material for its nuclear programme.

The talks, a mirror image of the last attempt in October 2009 to temper Iran's uranium enrichment drive, are taking place amid tougher international sanctions and few hopes that a deal can be struck.

Before Sunday's announcement by Iran's atomic chief Ali Akbar Salehi, European sources hoped the meeting would mark re-engagement with Iran even if it did not produce instant results.

Iran claimed on Sunday it had added a new dimension to the nuclear equation by producing yellowcake.

"Iran has become self-sufficient in the entire fuel cycle," said Salehi in Tehran.

That meant it would "go to the negotiations with strength and power," he added.

In Washington, White House official Mike Hammer said: "This calls into further question Iran's intentions and raises additional concerns at a time when Iran needs to address the concerns of the international community."

A European source said: "Obviously the concerns that we have are very valid."

Tehran insists it has a right to enrichment to make fuel for peaceful energy use as a signatory of the Non-Proliferation Treaty, and has vowed to continue doing so.

"No matter how much effort they put into their sanctions in creating all sorts of hindrance... our nuclear activities will proceed," Salehi said.

President Mahmoud Ahmadinejad reiterated on Saturday that enrichment is "non-negotiable" while calling on world powers to "stop being hostile."

Iran also accuses Western powers and Israel -- the sole if undeclared nuclear weapons state in the Middle East -- of being behind the recent assassination of a top nuclear scientist and attempts to sabotage the Iranian nuclear programme.

The last talks in Geneva in October 2009 ended with cautious optimism following the first direct encounter between senior US and Iranian officials for 30 years.

But proposals for a deal on enriching Iran's uranium outside the country swiftly unravelled afterwards.

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