Russia has called on Iran to stop work on uranium conversion immediately, a day after it resumed operations at its nuclear facility at Isfahan.
Iran's main partner in its effort to develop nuclear power urged Tehran to continue co-operating with the UN nuclear watchdog, the IAEA.
The IAEA meets on Wednesday to discuss whether Iran should be referred to the UN Security Council for sanctions.
Iran has said it is ready for talks, and will put forward new proposals.
The US, the EU and the IAEA have called on Tehran to return to negotiations on its nuclear programme.
The EU and Washington want Iran to abandon its scheme, which they suspect is a cover for a nuclear weapons programme, in exchange for political and economic concessions.
Iran suspended its nuclear programme in 2004 to allow for talks, but began work at Isfahan on Monday after Iran rejected the latest EU offer.
Mounting calls
Russia is helping Iran to build its first nuclear plant at Bushehr, for which it will supply fuel.
NUCLEAR FUEL CYCLE Mined uranium ore is purified and reconstituted into solid form known as yellowcake Yellowcake is converted into a gas by heating it to about 64C (147F) Gas is fed through centrifuges, where its isotopes separate and process is repeated until uranium is enriched Low-level enriched uranium is used for nuclear fuel Highly enriched uranium can be used in nuclear weapons
However, the foreign ministry said on Tuesday that "the wise decision would be to stop work... on uranium conversion without delay".
"We are convinced that the situation that has arisen now has not gone beyond the point of no return," the statement said.
Tehran should halt activity and continue to work closely with the IAEA "to resolve remaining question over Iran's nuclear programme", it added.
In the US, President George W Bush said Iran's willingness to return to talks was a "positive sign".
But he added that he was still "deeply suspicious" that Iran was intent on developing a nuclear weapon.
Speaking on behalf of the EU, France said it was still possible to seek a negotiated settlement.
IAEA talks began on Tuesday, and are expected to take several days.
Correspondents say Washington, backed by Japan, Canada and Australia, believe the diplomatic route is now exhausted and the only next step is to refer Iran to the UN Security Council.
However, a diplomat told Reuters news agency the board of governors was not likely to call for a UN referral just yet, giving both Iran and the EU time for more talks.
Conversion process
Iran says it has the legal right under the Nuclear Non-proliferation Treaty to carry out the nuclear fuel cycle.
President Mahmoud Ahmadinejad, who took office last week, said Iran had done nothing unlawful by resuming uranium conversion. He said he would put forward new proposals for negotiation after forming a cabinet.
The Isfahan plant is Iran's main uranium conversion facility. Conversion is an early stage in the nuclear fuel cycle, turning raw uranium - known as yellowcake - into the feedstock for enriched uranium.
Uranium enriched to a low level is used to produce nuclear fuel, while further enrichment makes it suitable for use in atomic weapons.
Mohammad Saeedi, deputy head of Iran's Atomic Energy Organisation, said on Monday that work at Isfahan had resumed under the supervision of the IAEA.
He later said that work would begin on Wednesday in previously sealed-off areas of the plant, taking the conversion process further.