Iranian and American officials have held secret talks to discuss renewing diplomatic relations if a deal is reached on Iran's nuclear program and sanctions are lifted, the Times reported early on Monday.

According to the report, the two nations are discussing the possibility of opening a U.S. trade office in Teheran. This would be the first American diplomatic mission in the Islamic republic since the U.S. embassy in Teheran was overrun in 1979 during the Islamic Revolution, leading to the hostage crisis that haunted Jimmy Carter's presidency.

The Times quotes anonymous Iranian government officials as saying that these talks are due to continue this week in Baku, Azerbaijan, where the Iranian delegation will be headed by Mohammad Reza Sabzalipour, head of Iran’s global trade bureau.

The United States has denied that talks on renewing diplomatic relation between the two nations were taking place. the report says.

Meanwhile, U.S. President Barack Obama said there is still "a big gap" in nuclear negotiations with Iran. In an interview with CBS aired Sunday, Obama said a permanent agreement may not be achieved before November 24, the current deadline for the nuclear talks.

Last week, the Wall Street Journal reported that Obama sent a secret letter to Iran's supreme leader, Ayatollah Ali Khamenei, last month, in which he wrote that the two nations have shared interests in fighting the Islamic State group in Iraq and Syria, but that any cooperation between Tehran and Washington on this issue would hinge upon reaching an agreement over Iran's nuclear program.

A senior Iranian official said Sunday that Obama’s secret letter to Khamenei last month had a “positive impact on Iran’s leadership.”

In Tehran’s first public acknowledgment of the letter, in which Obama reportedly stated that a nuclear agreement with Iran could pave the way to U.S.-Iranian cooperation against Islamic State, also known as ISIS or ISIL, Ali Khoram, adviser to Foreign Minister Mohammad Javad Zarif, told London-based Al-Sharq Al-Awsat that the letter had changed the Iranian leaders’ approach to the possibility of reaching a nuclear agreement.

“Despite 30 years of mistrust, Iran and the U.S. are convinced that it is in their national interests to negotiate a final settlement,” said Khoram. He said there has been a shift in Iran’s view of the United States as the “great Satan,” in light of changes in Iran’s policies towards the Israeli-Palestinian conflict and towards Syria and Iraq.

Prime Minister Benjamin Netanyahu said Sunday that Israel would not accept an international agreement that enabled Iran to remain a nuclear threshold state, calling that scenario a danger for the entire world.

Netanyahu made his remarks to ministers at the start of the weekly cabinet meeting in Jerusalem, just as a tripartite summit opened in Muscat, Oman aimed at reaching a breakthrough and securing a permanent agreement over Iran's nuclear program by the official deadline of November 24. U.S. Secretary of State John Kerry, Iranian Foreign Minister Mohammad Javad Zarif and the EU’s envoy to the nuclear negotiations, Catherine Ashton will meet for two days to discuss ways to advance the negotiations.

"The international community now faces a simple choice: To give in to the demands of Iran in an agreement of surrender that is dangerous not just to Israel, but for the entire world, or to stand firm on the demand that Iran dismantles its capability to manufacture nuclear weapons," Netanyahu told ministers. "Israel will not agree to an agreement that leaves Iran as a nuclear threshold state; it is dangerous for all of us," he added.