EU diplomacy chief Catherine Ashton on Friday agreed to resume long-stalled nuclear talks between world powers and Iran on December 5, and suggested they be held in Austria or Switzerland.

Ashton's office said she "has agreed to their proposal to begin talks on December 5" and "now looks forward" to meeting Tehran's chief negotiator Saeed Jailili to discuss the country's nuclear programme.

Iran this week proposed the talks take place in Istanbul but "Ashton's preference is that the first meeting take place somewhere else in Europe and has proposed Austria or Switzerland."

US State Department spokesman Philip Crowley took a similar position Friday.

"Istanbul could still be a location for a second follow-on meeting," he told reporters.

"But the general consensus is that the first meeting should be somewhere in central Europe."

Ashton represents Britain, China, France, Russia, Germany and the United States in the talks aimed at allaying Western concerns that Iran's nuclear programme is masking a weapons drive under the guise of a civilian programme, something Tehran denies.

In a letter seen by AFP sent to the Iranian side by Ashton's office, the EU diplomat proposes the talks kick off with a dinner December 5 and continue through to midday December 7 to have "sufficient time for a full and in depth exchange of views".

The last round of negotiations deadlocked in October 2009 and Washington this week said there could be multiple meetings and multiple venues.

Tehran's proposal of Istanbul had been expected to irritate the United States, which views Turkey with mistrust since it set up a nuclear-swap deal with Tehran earlier this year as Washington shored up anti-Iran sanctions.

US Defense Secretary Robert Gates on Monday rejected comments by Israeli Prime Minister Benjamin Netanyahu calling for a "credible" military threat against Iran to ensure it does not obtain nuclear weapons.

President Barack Obama's administration, while not ruling out a military option against Iran, has so far stressed sanctions and diplomacy as its preferred course for dealing with the Islamic republic's nuclear drive.

A European diplomat told AFP this week that aside from dates and venues "the content" of the negotiations remained up in the air.

The New York Times last month said the Western side was preparing a new, more onerous offer for Iran than the one rejected by supreme leader Ayatollah Ali Khamenei last year.

It would require Iran to send more than 4,400 pounds (1,995 kilograms) of low-enriched uranium out of the country, an increase of more than two-thirds from an earlier deal struck in Vienna.

Iran, which frames the talks for its home audience as about global nuclear disarmament, said categorically on Tuesday that it would not discuss the fuel swap during the upcoming negotiations.

Iranian President Mahmoud Ahmadinejad ordered Iran's atomic body in February to start refining uranium to 20 percent after an original version of the nuclear fuel swap deal drafted by the UN atomic watchdog fell through.

World powers responded on June 9 by backing new UN sanctions against Iran.

Sanctions notably ban investments in oil, gas and petrochemicals while also targeting banks, insurance, financial transactions and shipping -- all of which Tehran has brushed off as having no impact.

The latest move on the sanctions front came on Friday from Kuwait, whose central bank asked Gulf emirate banks, investment companies and money exchange firms to start implementing UN sanctions against neighbouring Iran, local media said.

Nigeria the same day threatened to report Iran to the UN Security Council if an illegal arms shipment sent from an Iranian port and discovered in Lagos violated sanctions over its nuclear programme.

Obama meanwhile on Wednesday extended for another year a freeze on Iranian assets in the United States first imposed 31 years ago by then president Jimmy Carter, noting that ties between the two countries had yet to be normalised.