Vienna (AFP) - Nuclear talks between Iran and world powers moved to the next level Tuesday as negotiators began work on transforming an interim deal into an ambitious lasting accord.

Expectations were not high, however, for the scheduled three-day Vienna meeting between Iran and the United States, China, Russia, Britain, France and Germany, the first in a likely series of tricky encounters.

Iran's supreme leader Ayatollah Ali Khamenei said Monday he was "not optimistic" and that he expected the talks to "lead nowhere" -- although he also said he was not against the negotiations.

Iranian Foreign Minister Mohammad Javad Zarif, speaking after a dinner Monday with the chief negotiator for the six powers, EU foreign policy chief Catherine Ashton, was more upbeat.

"We believe we can reach an agreement and we have come here with the political will to reach a final agreement," Zarif was quoted by Iran's ISNA news agency as saying, adding however that it "will take time".

"It is probably as likely that we won't get an agreement as it is that we will," said one senior US administration official.

"But these negotiations are the best chance we have ever had."

Iran has long been suspected of seeking atomic weapons, despite its denials, and the US and Israel -- widely assumed to have a formidable nuclear arsenal itself -- have never ruled out military action.

Foreign ministers from the seven countries struck a deal in Geneva on November 24 that was widely hailed as an enormous breakthrough after a decade of failed diplomatic efforts and rising tensions.

Under the accord, which took effect on January 20, Iran scaled back certain nuclear activities in exchange for minor relief from painful sanctions and a promise of no new sanctions.

For the first time the West accepted Iran enriching uranium, a process producing nuclear fuel but potentially also material for a bomb, having previously demanded a total suspension.

But the freeze only lasts until July 20 -- although it can be extended -- and experts say that success in Geneva came at the price of postponing discussions on the really difficult issues.

"Geneva really was a stop gap, a band-aid solution that didn't really heal the wounds," Siavush Randjbar-Daemi, Iran and Middle East lecturer at Manchester University, told AFP.

- Comprehensive solution -

Under the "comprehensive" solution that the parties aim to sew up by November, the six powers want Iran to scale back permanently -- or at least for a very long time -- its nuclear programme.

This might include closing the underground Fordo facility, slashing the number of centrifuges enriching uranium, cutting the stockpile of fissile material and altering a new reactor being built at Arak.

This, plus much tighter UN inspections, would not remove entirely Iran's capability to get the bomb but would make it substantially more difficult.

In exchange, all UN Security Council, US and EU sanctions on Iran -- which are costing it billions of dollars every week in lost oil revenues, wreaking havoc on the economy -- would be lifted.

But whether Iran will play along remains to be seen, having before the talks set out a number of "red lines" including not dismantling any facilities.

- Washington's watching -

The senior diplomats in Vienna will be well aware that whatever they agree will need to be sold not only to other countries like Israel and the Sunni Gulf monarchies, but also back home.

Obama has to contend with members of Congress threatening more sanctions and demanding -- with Israel -- that nothing short of a total dismantlement of Iran's nuclear facilities will do.

Iranian President Hassan Rouhani, meanwhile, whose election in 2013 has helped thaw relations with the West, is already on thin ice with hardliners seeking to turn Khamenei against him.

"The trouble is that both sides have hard men outside the negotiating room who have to be satisfied," Richard Dalton, the former British ambassador to Tehran now at think-tank Chatham House, told AFP.

culled from Yahoo news