The leaders of Europe are hoping to guide the United States and Iran away from confrontation, knowing that a miscalculation from either side could result in a devastating war and a serious nuclear proliferation crisis.

European Union foreign ministers are holding a rare emergency meeting on Friday afternoon, but will be wary about meting out any diplomatic punishment amid signs of de-escalation from Washington and Tehran following the US killing of an Iranian general in Baghdad, and Tehran's retaliatory missile attack on two US bases in Iraq.

Their discussions will begin with the "evolving situation" in Libya, according to an EU briefing note, before moving on to the latest in Iraq.

If it is proven that a Ukrainian airliner was this week downed by an Iranian missile, that will likely complicate matters again for the diplomats.

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"Iran's desire to prevent the crisis from escalating has bought us some time, it has the effect of cooling this down just a little," a senior EU diplomat told Reuters news agency.

Foreign ministers will receive a briefing on the latest situation in the region from NATO Secretary-General Jens Stoltenberg at Friday's meeting.

On Monday, EU foreign affairs chief Josep Borrell tweeted his regret at Iran's decision to step away from more aspects of the nuclear deal, which, he said, was "now more important than ever".

And European Commission President Ursula von der Leyen said this week: "From a European viewpoint, it is important for Iran to return to the nuclear deal. We have to convince Iran that it's also in its own interest."

But the simmering tensions have highlighted Europe's struggles to influence either side and play a mediating role - with the United Kingdom, France and Germany desperately trying to pressure Iran to stick to the landmark 2015 nuclear pact.

They also want to convince US President Donald Trump, who on Wednesday called on them to join him in withdrawing from the nuclear agreement, that they are tough-minded allies who will not be deceived by Tehran.

With Baghdad also caught between the crossfire of Washington and Tehran, there are growing concerns that the US-led coalition fighting the ISIL (ISIS) group could be weakened, or even forced out of Iraq, something that the European powers see as crucial to avoid for their own security interests.

"We need to coordinate and maximise the effect everybody has in trying to de-escalate what the Iranians do, but it's the same for the Americans. What's most worrying is a miscalculation," said a French diplomatic source.

Nuclear violations

But Iran's decision on Monday to scrap limits imposed on its nuclear enrichment under the arms control accord has also left the European powers in an awkward position.

Iran, which says its nuclear programme is for civilian purposes, has already breached many of the restrictions under the deal, intended to increase the amount of time Tehran would need to accumulate enough fissile material for an atomic bomb from two to three months to about a year.

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The latest announcements could start drastically reducing that time and the three European powers - who along with Russia and China, have attempted to salvage the deal since the US pulled out and reimposed tough economic sanctions in 2018 - are eager to send a firm message that the breaches are unacceptable.

They have agreed to launch a dispute resolution process within the accord that could ultimately lead to renewed UN sanctions on Tehran, but have hesitated on the timing following this week's tensions, fearing that Iran may react more aggressively.

Despite its nuclear announcement, Tehran has said inspectors from the international nuclear watchdog, the IAEA, can continue their inspections, leaving some room for diplomacy.

"Iran has not set any targets or deadlines when it comes to uranium enrichment targets, so that gives us time," a second EU diplomat said.

A third EU diplomat said the decision to launch the process had been made, but that Friday was unlikely to see any such formal announcement.

"There is a concern that it could trigger an Iranian escalation," said a European diplomat.

"We have made it clear that our objective in doing this is to resolve our differences over Iran's violations within the framework of the nuclear deal. Launching this process is not aimed at going to the UN for now."