After months of diplomatic wrangling, the United States and France had hoped Tuesday's talks would produce a resolution imposing sanctions on Iran for defying an Aug. 31 U.N. deadline to halt enrichment. Western powers accuse Iran of seeking nuclear bombs, while Tehran insists it only wants civilian nuclear energy.

Still, a top European diplomat, who spoke on condition of anonymity because of the sensitivity of the talks, said Russia, which has sided with Iran on many points, made some concessions at Tuesday's talks. The Russians agreed to a measure prohibiting financial transfers to "problematic'' Iranians linked to nuclear or ballistic missile programs, the diplomat said.

Russia still opposes the broader asset freeze that Britain, France and Germany proposed in a draft U.N. resolution presented in October, the diplomat said.

The discussions now move to the United Nations in New York. The Americans and Europeans are pushing for a resolution by the end of the year.

"We are coming up to the time (when) the credibility of the U.N. is at stake,'' U.S. State Department spokesman Sean McCormack said in Washington before the Paris talks.

Iranian President Mahmoud Ahmadinejad vowed Tuesday to stick by the nuclear program and issued a new threat to downgrade relations with the EU if European negotiators opted for tough sanctions. He gave no details on how ties might be downgraded. The EU is Iran's biggest trading partner.

The Russians also remained resistant to a measure expanding the powers of the International Atomic Energy Agency to monitor Iran's nuclear program, considering that a "provocation'' to Iran, the European diplomat said.

The draft resolution would exempt a nuclear power plant being built by the Russians in Iran, but not the nuclear fuel needed for the reactor. Russia wants to remove any mention of the Bushehr reactor.

Washington's patience had appeared to be wearing thin.

When asked Tuesday when he expected Russia and China to begin supporting the resolution, the American participant in the discussions, Undersecretary of State Nicholas Burns, replied: "This afternoon would be a good time.''

Delegates from the five permanent members of the Security Council, the U.S., U.K., Russia, China and France, plus Germany and the European Union, met in Paris to try to agree on sanctions aimed at convincing Iran to stop enriching uranium.

After months of diplomatic wrangling, the United States and France had hoped Tuesday's talks would produce a resolution imposing sanctions on Iran for defying an Aug. 31 U.N. deadline to halt uranium enrichment. Western powers accuse Iran of seeking nuclear bombs, while Tehran insists it only wants nuclear energy.

The discussions now move to the United Nations in New York. The Americans and Europeans are pushing for a resolution by the end of the year.

"We are coming up to the time (when) the credibility of the U.N. is at stake," U.S. State Department spokesman Sean McCormack said in Washington before the Paris talks.

"We clearly have a stalemate in terms of communication and negotiation. I think Iran should answer the IAEA questions more specifically...these are minor problems," said Neuneck, who was in Brussels to attend an international conference on the Iran nuclear issue on Tuesday.

Neuneck, who is a physicist by profession, said he thought some sanctions on Iran will be decided upon by the end of the year, and added that "this will not solve the problem."

He said "uranium enrichment is a critical thing, but it can be solved. It can be solved through cooperation."

Neuneck said trust between Europe and Iran can be restored if Iran accepts the Additional Protocal for some time and if they answer some of the questions of the IAEA.

"I am sure the Europeans can then argue with the Americans and say, 'Look, the Iranians are flexible, they are not against negotiations.'"

Responding to US and Israeli military threats against Iran, the German expert said: "I think it is counter-productive. It does not solve any problem."

A Foreign Office spokesman said it had no record of who was going. "I think the government's views on Iran's comments regarding the Holocaust are well known but it is not up to us who travels to Iran."

Participants will consider documentary, pictorial, physical and demographic evidence in what Iranian officials depict as an academic investigation to establish the Holocaust's authenticity and whether the reported number of victims was exaggerated. Organisers say it will include submissions for and against. It will also focus on the plight of the Palestinians.

The conference will have six panel discussions and an open forum. It will discuss the capacity of Nazi death camps and the impact of the second world war on other national and ethnic groups. Iranian officials say Jewish suffering is played up at the expense of other victims. Manouchehr Mohammadi, the foreign ministry's research and education officer, said the conference was intended as a platform for open discussion of the Holocaust, which Iran claims is denied in the west.

"Our aim is to scientifically study the Holocaust and listen to both sides before reaching a conclusion," Mr Mohammadi said. "This issue has a crucial role regarding the west's policies towards the countries of the Middle East, especially the Palestinians. Iran isn't against or for. We weren't involved in this event so we can be a neutral judge. It is important for us to know the answer so that we can process our stances to issues in this region. If we conclude that the Holocaust happened, we will admit it but we are still going to ask why Palestinians have to pay." He said it would not be a forum for anti-semites or neo-Nazis, and rabbis would attend. "Our policy doesn't mean we want to defend the crimes of Hitler."

Mr Ahmadinejad has called for Israel to be "wiped off the map" and has said its inhabitants should go to Europe or Alaska.

Michael Rosen, of the Community Security Trust, which works to safeguard Jews in Britain, said he was aware of the event but that it was not clear who was planning to attend from the UK. Karen Pollock, of the Holocaust Educational Trust, said: "To hold a state-sponsored conference questioning the truth of the Holocaust is not only deeply disturbing but a huge insult to Holocaust survivors and the families of Holocaust victims."

According to ISNA, the would-be decision is also more attuned to existing trade volume between Iran and European nations, the country's major economic partners, which is transacted through the 'euro banks'. "Such inclination has been underlying part of our economic policy for awhile and our Oil Stabilization Fund (OSF) in dollar is at its lowest now," Davud Danesh-Jafari continued.

Back in September, the head of the Central Bank of Iran (CBI) Ebrahim Sheibani had threatened that Iran would resort to dollar-to-euro conversion if the U.S. pressure continued. Moreover, the 9/11 event seemed to consolidate a tentative unanimity being formed on this matter among Iranian statesmen after the emergence of euro in 2000.

Experts believe that less reliance on dollar and conversion to euro may increase Iran's financial flexibility and access to euro accounts would be easier if the U.S. chooses to impose a unilateral economic sanction on the country.

"The statement that North Korea would act as a nuclear power at the negotiations means that, in exchange for its nuclear disarmament, it will demand the withdrawal of US nuclear weapons from South Korea and other countries of the region," an informed North Korean diplomatic source was quoted as saying by the Russian news agency.

He added that North Korea is ready to return to the negotiations if the conditions defined on October 31, would be observed. The heads of the North Korean, Chinese and US delegations to the six-party talks on the North Korea nuclear problem met in Beijing in October.