Iran and the US are staking out hardline positions ahead of the resumption of talks next month led by three European powers, the so-called EU3, with diplomats doubtful that the Islamic republic can be persuaded to give up development of the nuclear fuel cycle in exchange for proposed incentives.

Mohammad Khatami, Iran's moderate president, told reporters in Tehran on Wednesday that Iran would “definitely” resume work at its Isfahan plant regardless of what France, Germany and the UK put on the table. Production at Isfahan of uranium hexafluoride gas has been suspended under the interim agreement reached with the EU3 last year. However, Mr Khatami was also reported as saying Iran did not intend to take the next step and resume uranium enrichment.