The EU's top foreign policy official says high-level nuclear talks in Russia between Iran and six world powers have been suspended, but experts from both sides will meet next month to see if there is enough common ground for new negotiations.

The talks were hosted by the EU's top foreign policy official, Catherine Ashton, who says she will be in touch with top Iranian negotiator Saeed Jalili after the July 4 experts' meeting in Istanbul to decide on when or whether to resume the talks.

Ashton spoke Tuesday after two days of talks made little progress in defusing international fears that Iran might turn its nuclear program to making weapons.

Iran denies such ambitions, insisting its atomic activities are geared only toward producing reactor fuel and making medical isotopes. It wants international sanctions lifted before it considers curbing its uranium enrichment.

Russia launched a desperate bid today to save nuclear talks between six world powers and Iran from collapse and lessen the chances of a Middle East conflict that could draw in the United States.

Failure to reach an agreement that limits Iran's nuclear activities would increase the chances that Israel, already skeptical of diplomatic efforts to prevent Iran from building a nuclear weapon, could launch an attack, a scenario that potentially could pull in the U.S. and spread chaos throughout the Middle East.

Obama could suffer if no deal reached

Diplomats said the negotiations remained deadlocked going into Tuesday, despite pleas from the presidents of the U.S. and Russia for Iran to agree to curb nuclear activities. Iran says sanctions crippling its oil industry must be lifted before it does anything.

A top Russian official reportedly met twice with Iran's chief envoy on the sidelines of the talks Tuesday, as the host nation tried to keep negotiations on track. Sergei Ryabkov, Russia's deputy foreign minister, conferred with top Iranian negotiator Saeed Jalili, said one of the diplomats.

The diplomat, like others who spoke to reporters, demanded anonymity because he was not authorized to comment publicly on the closed talks.

U.S. President Barack Obama could suffer at home if talks fail, even if Israel holds back from attack, because a derailed diplomatic track would give Mitt Romney, his Republican rival for office, additional leeway to criticize him for being too soft on Iran.

Diplomats from several nations meeting with Iran in Moscow depicted the talks as a significant attempt to make headway in persuading Tehran to stop higher-grade uranium enrichment.

Expectations were restrained after Monday's meeting ended on a downbeat note, with diplomats saying Iran had toughened its conditions in exchange for considering demands that it stop enriching from low levels to higher purities closer to the consistency needed to arm nuclear missiles.

Tehran defends uranium enrichment

Tehran insists it is enriching only to make reactor fuel and medical isotopes. But it has refused foreign offers of fuel and is stonewalling a UN probe into suspicions that it secretly worked on atomic arms, allegations it strenuously denies. It dismisses UN and other international sanctions meant to pressure it into stopping enrichment, which can also turn uranium into the core of a nuclear weapon, saying it has a right to do so under international law,

Obama and Russian President Vladimir Putin jointly urged Iran to show flexibility at the Moscow talks ahead of Tuesday's session.

"We agree that Iran must undertake serious efforts aimed at restoring international confidence in the exclusively peaceful nature of its nuclear program," they said on the sidelines of the meeting of G20 nations in Mexico.

But Iran said the onus was on its six negotiating partners — the U.S., Russia, China, Britain, France and Germany — to make the first move and agree to Tehran's demands. A member of the Iranian delegation, who demanded anonymity because he was not the official spokesman for his side, said if the six accept Iran's conditions "there will be a big progress in a short period of time."

"But if they pursue the path they've been following, any progress in the talks will be stalled," he told reporters.

Ashton's spokesman, Michael Mann, spoke of "pretty tough" going after Monday's session, with Iran presenting arguments and objections that went over ground already covered in two previous inconclusive meetings in April and May.

While the Islamic Republic has previously mentioned lifting sanctions or postponing pending ones, one of the diplomats said Monday's request for "sanctions relief" was the most direct to date. That appeared to reflect the mounting pain caused by accumulating sanctions, particularly international embargoes on Iran's oil sales.

In addition to longer-term UN and other sanctions, Tehran is now being squeezed by the widening international embargo on its oil sales, which make up more than 90 per cent of its foreign currency earnings.

Sanctions cut exports of Iranian crude

Sanctions levied by the U.S. have already cut exports of Iranian crude from about 2.5 million barrels a day last year to between 1.2 million and 1.8 million barrels now, according to estimates by U.S. officials. An EU embargo on Iranian crude that starts July 1 will tighten the squeeze.

Comments by Ali Bagheri, the No. 2 on the Iranian delegation, reflected the gap between the two sides' priorities.

"We elaborated in detail ... the illegality of referring Iran's nuclear issue to the UN. Security Council and issuance of UN Security Council resolutions," he told reporters, referring to Security Council demands — enforced by sanctions — that Iran stop enriching.

The six nations formally are only prepared to ease restrictions on airplane parts for Iran's outmoded, mostly U.S.-produced, civilian fleet and are offering technical help with aspects of Iran's nuclear program that cannot be used for military purposes.

While not budging on lifting existing sanctions or those already decided upon, diplomats familiar with the talks told The Associated Press that the six were also prepared to guarantee that no new UN penalties would be enacted if Tehran compromises enough. The diplomats demanded anonymity because that offer has not yet been formally made.

For Iran, the main formal demand remains international recognition of its right to enrich and related issues — with increasing emphasis on sanctions relief.

The six also want Fordo, the underground Iranian facility where most of the higher-level enrichment is taking place, shut down and for Iran to ship out its higher-grade stockpile. Fordo is of special concern because it might be impervious to air attacks, a possible last-resort response to any Iranian bomb in the making.