Iran and the US held their first substantive high-level meeting since the 1979 Islamic revolution on Thursday night at multilateral talks hailed on both sides as a fresh start for nuclear negotiations, raising hopes of a solution to the long running stalemate.

The US secretary of state, John Kerry, and the Iranian foreign minister, Mohammad Javad Zarif, sat next to each other at the seven-nation meeting at the UN headquarters, and lingered afterwards for a bilateral discussion of more than 20 minutes, a breakthrough in a relationship that has been frozen for more than three decades.

The meeting was chaired by the EU foreign policy chief, Catherine Ashton, who said that the parties would meet again in Geneva on 15 October for a two-day meeting aimed at achieving the first real diplomatic progress for several years. Zarif and Kerry said it was possible that the two of them would attend the Geneva meeting.

Ashton said she and Zarif both wanted a deal concluded in an ambitious timeframe and said an agreement could be implemented within a year.

"The discussions were very substantive, businesslike," Zarif said, adding he hoped a solution could be found in a timely fashion.

Kerry noted a change in tone from Iran saying Zarif was "very different in the vision that he held out with respect to the possibilities for the future. I have just met with him now in a side meeting in which we took a moment to explore a little further the possibilities of how to proceed based on what President Obama laid out in his speech to the general assembly earlier this week," Kerry said.

"And we've agreed to try to continue the process that will make concrete and find a way to answer the questions that people have about Iran's nuclear program."

The secretary of state suggested Zarif had put some new ideas forward, saying: "I think all of us were pleased that the foreign minister came today, that he did put some possibilities on the table. Now it's up to people to do the hard work of trying to fill out what those possibilities will do."

Ashton said: "It was a substantial meeting with a good atmosphere, and energetic. We had a discussion on how we would go forward with an ambitious timeframe to see if we can move along quickly … The good news is there are talks about a timetable."

The meeting was also attended by foreign ministers from the UK, France, Germany, Russia and China. Britain's foreign secretary, William Hague, also welcomed what he described as a new Iranian approach to the talks.

"I think the tone and spirit of the meeting we've had has been very good and indeed a big improvement on the tone and spirit of previous meetings on this issue and I pay tribute to Minister Zarif for that and for taking the approach that he has so far," Hague said.

Ashton noted that the six-nation negotiating group that she convenes had previously offered a confidence-building package involving some sanctions relief in return for Iran accepting limits on its uranium enrichment, and getting rid of its stockpile of medium-enriched uranium, which is the main proliferation concern.

Western diplomats have said a more comprehensive deal could be done, in which Iran agrees only to produce low-enriched uranium for use in nuclear power stations and accepts more stringent scrutiny from weapons inspectors, and, in return, the West lifts the bulk of its sanctions and recognises Iran's right to enrich. Iranian officials have hinted that such a deal might be possible.

Ashton said she was keen to hear any proposals Tehran might have before the Geneva meeting, asking that they be provided early so they could be studied.

In his remarks after Thursday night's meeting, Zarif hinted that a trade-off was possible, but was vague on its outlines.

"We hope to be able to make progress towards resolving this issue in a timely fashion based on respecting the rights of the Iranian people to nuclear technology for peaceful purposes, including enrichment, at the same time making sure that there is no concern on the international level that Iran's nuclear programme is anything but peaceful," he said.

How far Iran is prepared to go in removing international concern could determine whether the talks succeed or fail. Western diplomats said that more transparency alone would not be enough; Tehran would have to accept the principle of limits on its uranium enrichment. That may become clearer in Geneva.