BAGHDAD: Iran has made the first move in attempts to gain an edge in nuclear talks with the US and other world powers. It agreed in principle to allow UN inspectors to restart probes into a military site suspected of harbouring tests related to atomic weapons.

The tentative accord—announced Tuesday as envoys headed to the Iraqi capital for negotiations—is likely to be used by Iran as added leverage to seek concessions from the West on sanctions. But US officials have shown no willingness to shift into bargaining mode so quickly, setting the stage for possible tense moments after talks set for Wednesday resume in Baghdad's fortified Green Zone.

Still, Iran's move raises the pressure on the West for some reciprocal gestures to keep dialogue on track and further highlights Tehran's apparent aims of opening a long give-and-take process over its nuclear ambitions.

A major breakthrough in the impasse was not expected in Baghdad, with officials and experts saying both sides will seek to demonstrate enough progress to keep the process moving forward.

That could cool down worries in international markets over possible military action, but reinforce the suspicions of Israeli leaders who claim Iran seeks only to buy time to keep up its production of nuclear fuel.

Iran's envoys, meanwhile, promoted the Baghdad round as an opportunity to set aside past obstacles.

''That is the basis for the beginning of a new cooperation,'' said Saeed Jalili, the top Iranian nuclear negotiator, who arrived in Baghdad late Monday.

''We hope that the talks in Baghdad will be a kind of dialogue that will give shape to such cooperation.''

Iran's ambassador to Iraq, Hasan Danaeifar, said the Baghdad talks could be historic.

''Should the talks set a start for a serious, constructive settlement of the issues, it could be a historic meeting for all sides,'' the official IRNA news agency quoted him as saying.

A senior Western diplomat in Baghdad said sanctions on Iran's oil exports, set to take effect July 1, likely pushed Tehran to the bargaining table.

''I don't think the Iranians are coming to these talks because they suddenly changed their minds about anything. They are coming to these talks because sanctions are beginning to bite,'' the diplomat said in an interview this week with The Associated Press. He spoke on condition of anonymity to discuss the negotiations candidly.

In Iranian terms, that means offering some possible accommodations—such as opening to greater UN inspections—but sticking to its right to enrich uranium as a signatory of UN nuclear treaties. The Baghdad talks, involving the five permanent UN Security Council members plus Germany, could offer a test of how much the UN and allies are willing to bend from demands for Iran to halt to all enrichment and instead concentrate on just stopping the highest-grade production.

The West and others fear the 20 per cent-level enrichment can be turned quickly into weapons-grade of over 90 per cent.

Iran has repeatedly denied it seeks nuclear arms and says its reactors are only for power and medical research.

On Tuesday, the official Islamic Republic News Agency reported that Iranian scientists had inserted a domestically made fuel rod, which contains pellets of 20 per cent enriched uranium, into the core of a research nuclear reactor in Tehran.

The advance would be another step in achieving proficiency in the entire nuclear fuel cycle. Iran said in January that it had produced the first nuclear fuel rod, and that it had to find a way to make them because Western sanctions prohibit their purchase from foreign markets.

Western claims about a clandestine atomic weapons program have often cited Iran's Parchin military facility, where the UN's International Atomic Energy Agency believes Iran in 2003 ran explosive tests needed to set off a nuclear charge. Iran describes Parchin as a conventional military site.

The agency's chief, Yukiya Amano, returned to Vienna on Tuesday from a one-day trip to Tehran and said an agreement is within reach to give inspectors ''access to sites, scientists and documents it seeks to restart its probe.''

He noted that some differences still exist but claimed they ''will not be an obstacle to reach agreement.'' He gave no details on the unsettled points or when the pact could be signed.

Amano's remarks brought a measured response from Washington and allies.

White House press secretary Jay Carney called the announcement a ''step forward'' and ''a step in the right direction.'' But he stressed that the administration will ''make judgments about Iran's behaviour based on actions, not just promises or agreements.''

''We judge and will judge Iran by its actions,'' Carney said, adding that ''we're not at the stage of negotiating what Iran would get in return for fulfillment of its obligations.''

In Germany, Foreign Minister Guido Westerwelle said the apparent inspection pact was an ''overdue step in the right direction.''

In Germany, Foreign Minister Guido Westerwelle said the apparent inspection pact was an "overdue step in the right direction."

But he added: "The aim is to make progress not just atmospherically but also on substance."

Israel's defense minister, Ehud Barak, dismissed it as a "deception of progress" to save off international pressure.

"It looks like the Iranians are trying to reach a technical agreement that will create a deception of progress in talks in order to reduce the pressure ahead of talks tomorrow in Baghdad and postpone harshening of sanctions," Barak said, according to a statement from his office.

On Monday, the US Senate backed proposals for further sanctions on Iran, including requiring companies listed on US stock exchanges to disclose any Iran-related business. US and European measures already have targeted Iran's oil exports — its chief revenue source — and effectively blocked the country from international banking networks.

Even before the meetings begin in Baghdad, expectations were kept in check.

Iraqi Foreign Minister Hoshyar Zebari said they will "not produce a miracle."

"But everybody is looking for some tangible steps on the basis of reciprocity," Zebari told AP in an interview.

Zebari said there is consensus in Iran for the first time to reach a diplomatic deal.

Mahdi Mohtashami, an analyst and former Iranian foreign ministry official, said "the two sides should begin with small steps, not big demands, if they are to make any progress."

The US has been vague about its immediate goals, with officials saying the talks will gauge Iran's seriousness and explore elements of a possible agreement.

President Barack Obama opposes a near-term military strike on Iran's nuclear facilities. He has pressed Israel to give diplomacy and sanctions time to work while insisting that military options are available should talks fail. Republicans have criticized Obama for holding talks with Iran at all.

The West has made clear that Iran must show evidence that its nuclear program is peaceful before it will even consider lifting sanctions.

"What we need to begin to get things started is something concrete, real and detailed from the Iranians," said the senior Western diplomat in Baghdad. Chances for a final resolution in Baghdad are "very slim," he said.

"There is no question of sanctions being lifted in exchange for promises, or in exchange for words on a piece of paper."

Fierce sandstorms since Monday have closed Baghdad's airport and could disrupt travel plans for some participants in the talks.

Having Baghdad as the venue is a symbolic victory for Iran and a showcase of its deep influence in the country more than nine years after US-led forces toppled Tehran's archenemy, Saddam Hussein.

Iran pushed for Baghdad as a way to boost the international prestige of the Iraqi government, which has close ties to Tehran. The talks also will take place inside the Green Zone, which was once the hub of US political and military operations after the 2003 invasion.