The White House yesterday ruled out previously authorised direct talks between Tehran and the US ambassador in Baghdad, which were to have focused on the situation in Iraq. The move marks a hardening of the Bush administration's position, despite pressure from the international community to enter into direct dialogue with Iran.

A White House official said that although the US envoy had originally been granted a mandate for talks with Iran, "we have decided not to pursue it."

Western diplomats hoped that talks on Iraq could have widened into a discussion of Iran's alleged nuclear arms programme. Iran has been asking in recent weeks for direct talks with Washington on the nuclear issue and the Bush administration had come under pressure from Kofi Annan, the United Nations secretary general, and countries such as Germany to hold direct talks.

Washington's decision not to pursue the talks with Iran on Iraq, which would have been conducted by the American ambassador, Zalmay Khalilzad, came as the US, Britain, France, Germany, Russia and China concluded a meeting in London last night to discuss a new offer to Iran. The Foreign Office reported progress on agreeing on a combination of sticks and carrots to try to entice Iran into suspending its uranium-enrichment programme, which is seen by the west as a step towards achieving a nuclear weapons capability.

The progress at the meeting contrasted with a bad-tempered discussion on May 8 between the foreign ministers of the six countries in New York.

The decision not to pursue direct talks has exposed rifts in the Bush administration on how to deal with Iran. Mr Khalilzad had told reporters on Sunday that the formation of the Iraqi government had cleared the way for direct negotiations with Iranian officials. "We have a lot of issues to discuss with them with regard to our concerns and what we envision for Iraq and are prepared to listen to their concerns," he told the Associated Press.

However, Frederick Jones, a National Security Council spokesman, said yesterday there were no longer any plans for talks. "We will assess the situation and see when talks with the Iranians about the situation in Iraq might be useful," he said, noting that the US had talked to Iran about Afghanistan and drug-trafficking. "If it makes sense in Iraq, we'll do it. But we'll assess it based on what makes sense."

The US has had no formal contact with the Iranian government since students in Tehran took 52 Americans hostage in 1979.

The tough White House line appeared to take Mr Khalilzad's office by surprise. A US official in Baghdad said senior administration officials, including the secretary of state, Condoleezza Rice, had previously said that Mr Khalilzad's talks with the Iranians could proceed once a government in Baghdad was sworn in.

There were also reports of rifts on how to respond to President Mahmoud Ahmadinejad's letter to George Bush. The Washington Post reported that some intelligence analysts saw the letter as an important diplomatic opening and US government experts had "exerted mounting pressure" on the White House to respond.

However, Tony Snow, the White House spokesman, ruled out any such response yesterday. "Iran, in responding to pressure, is trying to change the subject and we won't let them change the subject," he said. He said the precondition for bilateral talks would be that Iran cease enriching uranium and did "nothing to build up its capacity to make nuclear weapons".

In the London meeting, senior officials discussed the detail of an offer to construct a light-water nuclear reactor for Iran, which is seen as less of a threat than its uranium-enrichment programme. But the package also includes a threat to punish Iran with sanctions if it refuses to suspend uranium-enrichment.

These sanctions would include a ban on arms sales, no transfer of nuclear technology, no visas for Iranian leaders and officials, and freezing their assets.

There would also be an embargo on shipping refined oil products to Iran. Although Iran is a leading producer of crude oil, it is short of petrol and other oil derivatives.

Western diplomats are braced for rejection by the Iranians. The US, Britain and France would then return to the UN security council to table a resolution setting a deadline for Iran to suspend its uranium enrichment programme or face sanctions.

Guardian Unlimited © Guardian Newspapers Limited 2006

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