By Parisa Hafezi
TEHRAN (Reuters) - Iran said on Wednesday it welcomes "constructive" talks with world powers and the United States said Tehran could face "crippling" sanctions if such talks failed to end Iran's suspected nuclear weapons program.
In an official statement, Iran said it believed discussions could resolve disputes between the Islamic republic and the West, but it said it will press ahead with its work to develop atomic energy.
The statement was Tehran's response to an invitation by six world powers to discuss the nuclear row, according to Iranian state television.
"The Islamic Republic of Iran ... welcomes constructive and fair talks based on mutual respect and believes current problems could be resolved through talks," the statement said.
"The Islamic Republic of Iran will continue its nuclear activities in an active interaction with the (United Nations) International Atomic Energy Agency in the framework of the NPT (Non-Proliferation Treaty) like other agency members," it said.
Last week, President Mahmoud Ahmadinejad said Iran had prepared proposals to end the dispute, without giving details.
It was unclear whether Iran's counter-offer would be essentially different from previous ill-fated exchanges.
"We don't expect this package to be much different ... I think it will not be very helpful," said one Western diplomat.
The United States and its Western allies suspect Iran is aiming to develop nuclear bombs under the cover of a civilian program and want it to halt sensitive uranium enrichment. Iran rejects the allegation and says it will not bow to pressure.
Speaking in Washington, U.S. Secretary of State Hillary Clinton said the United States believed its decision to seek to engage Iran over its nuclear program and other issues would increase its leverage to impose sanctions if talks fail.
"We actually believe that by following the diplomatic path we are on, we gain credibility and influence with a number of nations who would have to participate in order to make the sanctions regime as tight and crippling as we would want it to be," Clinton told U.S. lawmakers.
The United States, Russia, China, France, Germany and Britain said on April 8 they would ask EU foreign policy chief Javier Solana to invite Iran to a meeting to find "a diplomatic solution to this critical issue," referring to the nuclear row.
It marked a significant shift in U.S. policy under President Barack Obama, whose predecessor George W. Bush shunned direct talks with Iran as long as it continued with enrichment activity.
If such talks fail, however, it is unclear whether the United States would actually be able to persuade China and Russia, which have resisted harsh sanctions on Iran, to then impose tougher penalties.
OFFERS AND COUNTER-OFFERS
While saying it would welcome talks, Iran also criticised the powers' statement issued after a meeting in London earlier this month, saying parts of it were contradictory and insulting by referring to a dual track strategy of carrots and sticks.
Iran has repeatedly dismissed demands that it stop enriching uranium, which can have both civilian and military uses. Tehran says its activities are aimed at producing electricity so that it can export more of its gas and oil.
The six world powers originally offered Iran economic and political incentives in 2006 to suspend enrichment. Iran's response hinted at some flexibility but ruled out suspension as a precondition for talks as stipulated by the powers.
Last June the six improved the offer while retaining the precondition. In reply, Iran said it wanted to negotiate a broader peace and security deal and rejected any "condescending" formula to shelve its nuclear program.
Western officials at the time felt Iran was trying to buy time to expand and make irreversible its nuclear program.
The Obama administration has said it is prepared to meet Iran without preconditions, but it has also made clear that suspension of enrichment remains the goal.
The Western diplomat said he believed the meeting would take place with "opinions to be exchanged ... but we will have to see how much further we can progress."
(Additional reporting and writing by Arshad Mohammed in Washington and by Fredrik Dahl; Editing by Louise Ireland and Vicki Allen)
