The European Union agreed on Saturday to try to clarify        Iran's nuclear stance within two weeks and Iran told visiting U.N. Secretary-General Kofi Annan it wanted fresh negotiations on the issue.

Annan's visit to Iran takes place two days after the U.N. nuclear watchdog, the        International Atomic Energy Agency (IAEA), reported Tehran had failed to meet the        U.N. Security Council's August 31 deadline to suspend sensitive uranium enrichment work.

The United States, which accuses Iran of seeking atomic bombs, said on Friday it was consulting European governments about possible sanctions against the Islamic Republic, but the EU signaled it wanted to see more dialogue with Tehran which says its atomic activity is aimed at producing power.

EU foreign policy chief Javier Solana will meet Iran's chief nuclear negotiator, Ali Larijani, next week to try to clear up ambiguities in Tehran's reply to the major powers' offer of broad cooperation if it stops the nuclear work.

"If the meeting goes well and Iran accepts the philosophy of the cooperation project we presented to it in June, I think we will be able to start a more formal negotiation," French Sunday newspaper Le Journal du Dimanche quoted Solana as saying.

Slovenian Foreign Minister Dimitrij Rupel said after the 25 EU ministers discussed the Iranian issue in Finland on Saturday: "We give Solana two weeks for his clarification talks."

But Solana told reporters: "There's no deadline, whenever we finish ... We are going to start in the coming days and I hope that it will be very short. We don't need many meetings."

Other EU ministers said Solana would report back to them in Brussels on September 15 and they had agreed not to take any action against Iran before then.

Annan met Iranian Foreign Minister Manouchehr Mottaki and Larijani, who is also the secretary of Iran's Supreme National Security Council, on Saturday.

Annan described his talks with Larijani as "constructive."

Larijani said: "Both sides agreed that it would be better to move by negotiations and we hope that Kofi Annan's very high capabilities could be used in that way," the semi-official ISNA students news agency quoted him as saying.

EU WANTS SOLUTION THROUGH DIALOGUE

The United States is the driving force behind possible sanctions but Russia has cast doubt on whether the U.N. Security Council could reach a quick consensus and said threatening Iran would lead to a "dead end."

In Finland, ministers declined to speak publicly about what sanctions they might apply if Tehran did not comply.

But Czech Foreign Minister Cyril Svoboda said a coalition might have to impose sanctions unilaterally if the        United Nations was unable to agree on punitive measures.

"It will be very, very difficult, but ... please, we need to stick together with the United States," he told reporters.

In reaction to the prospect of sanctions, Iran's deputy foreign minister for economic affairs, Alireza Sheikh-Attar said: "Putting Iran under sanctions will damage the big countries which consume oil. We have a plan for different scenarios to combat any possible sanctions."

World leaders and foreign ministers are set to discuss next steps toward Iran at their annual gathering in New York.

The five countries with permanent seats on the Security Council -- China, Britain, France, Russia and the United States -- plus Germany would meet in Berlin on September 7 to discuss the way forward, the French Foreign Ministry said.