President Bush said yesterday that the United States was ready to "take the leap" and hold direct talks with Iran for the first time since the Islamic revolution of 1979.

But Mr Bush and Condoleezza Rice, the United States Secretary of State, insisted that Tehran would first have to suspend all nuclear activities and open up facilities for inspection by the International Atomic Energy Agency.

In Iran's first official response, Manouchehr Mottaki, the Foreign Minister, said today: "We support dialogue in a fair and unbiased atmosphere, but we will not talk about our undeniable and legitimate rights, because this is the right of our people according to international laws and treaties.

He added: "We are ready to talk about common concerns and if the conditions are such in a way that we have outlined ... we are ready to negotiate with all parties."

The American offer of talks came ahead of a crunch meeting in Vienna today at which the five permanent members of the United Nations Security Council, plus Germany, will try to agree on a "carrot and stick" approach to resolving the nuclear stand-off with Iran.

Iran has defied a Security Council deadline to end its enrichment of uranium, a process that Tehran says is necessary for it to develop a nuclear power industry but which the United States believes is a front for a nuclear weapons programme.

Although diplomats say that the major powers made "substantial" progress during talks in London last week on possible incentives for Iran, including an offer to reprocess nuclear fuel outside the country, Russia and China are holding off against any threat of sanctions.

Before leaving for Vienna, Ms Rice said that there was now "substantial agreement" about the choice faced by Iran. "It’s time to know whether Iran is serious about negotiation or not," she said.

The American offer of talks was welcomed in Europe. Javier Solana, the European Union foreign policy chief, said that it represented the "strongest and most positive signal of our common wish to reach an agreement with Iran".

The Iranian Foreign Minister said today that Ms Rice’s statement - which also touched on American concerns over Iran’s human rights record and its alleged support for terrorism - "did not have any new words in it".

"Rice’s statement was not something new," Mr Mottaki said. "This is what was said in her previous speeches and interviews. It lacked a logical and new solution to resolve Iran’s nuclear issue."

He added: "Maybe they wanted to cover up their crimes in the region. First and foremost, the US should be held acountable for their crimes in Iraq, Afghanistan, the prisons of Guantanamo and Abu Ghraib. It is not wise to talks about human rights in the democratic system of the Islamic republic."

Mr Bush, who held lengthy discussions on the issue with Tony Blair last week in Washington, disclosed yesterday that he had spoken over recent days to Angela Merkel, the German Chancellor, President Chirac of France and President Putin of Russia.

Mr Bush again emphasised his commitment to finding a negotiated solution, but added: "What you’re seeing is robust diplomacy." He said that if Iran agreed to suspend its programme immediately, "we will come to the table - I thought it was important for the US to take the leap".

Until now, the US Administration has spurned pleas from European leaders to participate - on the ground that it could provide added legitimacy to a regime that was a named member of Mr Bush's "axis of evil".

Ms Rice described the United States's decision to take its place at the negotiating table with the "EU3" - Britain, France and Germany - as removing the "last excuse" for talks to fail. Asked whether the America would be willing to re-establish diplomatic relations with Iran, she ruled out a "grand bargain", but said that a negotiated solution to the dispute could "begin to change the relationship".

Ms Rice again made it clear that America would take whatever measures it thought necessary to counter a "direct threat" to its "vital interests". A senior Pentagon source has told The Times that Mr Bush is working on a "short timetable" to see whether negotiations succeed.

Other sources say improved intelligence on Iran's nuclear programme has increased the chance of it being neutralised by an airstrike and a decision on whether UN sanctions - or a package agreed between Europe, Japan and America - is a workable solution will be made by the end of this year.

Iran voluntarily suspended its nuclear programme while talks were active with the Europeans last year, but resumed and stepped up those activities this spring. Some experts fear that it is three years away from developing a weapon.

Margaret Beckett, the Foreign Secretary, said: "We are all striving to reach a diplomatic solution. The European side's goal is to present a serious and substantial offer of cooperation, which demonstrates to Iran the benefits that would flow from compliance rather than the further isolation which would result from their failure to do so."

/www.timesonline.co.uk/