"We think this meeting will be very important," Ahmadinejad told a news conference in Istanbul, where he attended a regional economic cooperation summit.

"We have suggested that in the forthcoming Istanbul meeting confrontation be replaced with cooperation and... this will be in the interest of all sides," he said through an interpreter.

"In cooperation we will have a win-win situation. There is no failure or defeat for any party.

"So we think the Istanbul meeting will be a historical and landmark event and we can replace confrontation with cooperation," he said.

The talks between the so-called P5+1 group of world powers and Iran, expected to be held in late January, would be the second round after negotiations resumed in Geneva earlier this month following a 14-month hiatus.

The West suspects that Tehran is developing am atomic bomb under the guise of a nuclear energy programme.

Iran denies the charges and insists its activities have a purely peaceful purpose.

The United Nations, the United States and the European Union recently slapped a series of new sanctions on Tehran over its refusal to suspend uranium enrichment, the sensitive process which can be used to make nuclear fuel or, in highly extended form, the fissile core of an atom bomb.

Ahmadinejad warned that Western powers would fail if they insisted on a policy of "psychological warfare, economic sanctions and increased political pressure" on his Islamic republic.

"If they continue the same policy... it will have only one result and it will be a defeat, a failure," he said.

The Iranian leader played down international sanctions imposed on his country, insisting they had given no harm to the economy.

"We have never felt the effect of those sanctions... They have no meaning in Iran because our economy is very strong," he said.

Earlier Thursday, Ahmadinejad attended the summit of the 10-member Economic Cooperation Organisation, accompanied by his new foreign minister Ali Akbar Salehi, who is also Iran's nuclear chief.

The pair met with Turkish leaders to discuss preparations for next month's nuclear talks.

Turkish Foreign Minister Ahmet Davutoglu refused to claim any mediation role, stressing that Turkey would only host the gathering.

Turkey's Islamist-rooted government has established close ties with Tehran, insisting on a diplomatic solution to the nuclear row and is reluctant to back a tougher line against the Islamic republic, its eastern neighbour.

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