The presidents of Iran and Russia have expressed hope for a diplomatic solution to the nuclear crisis on the eve of key talks aiming to break the deadlock, media reported on Saturday.

President Mahmoud Ahmadinejad and his Russian counterpart Dmitry Medvedev held their first telephone talks late on Friday, a day before the talks Saturday in Geneva, Iranian state media and the Kremlin said.

"In the Geneva negotiations... we can examine ways to make decisions in different fields and help resolve the existing issues," the website of Iranian state television quoted Ahmadinejad as saying.

He also expressed satisfaction over the current state of ties between Tehran and Moscow, which has substantial economic interests in the Islamic republic, state television said.

The Kremlin, meanwhile, quoted Medvedev as urging Iran "to cooperate fully with the International Atomic Energy Agency (IAEA) to clarify questions remaining about the Iranian nuclear programme."

"The Russian president reiterated his firm position on resolving the situation surrounding Iran's nuclear programme only by political and diplomatic means," it added.

Medvedev told Ahmadinejad he hoped for a "substantive and constructive dialogue" in Geneva on Saturday, it said.

Russia is one of the six world powers that last month gave Iran a proposal offering it full negotiations on a range of incentives if it suspends sensitive uranium enrichment operations.

EU foreign policy chief Javier Solana will hold talks on the package with Iran's top nuclear negotiator Saeed Jalili in Geneva on Saturday, in a meeting that for the first time will also be attended by a US envoy.

The West fears that Iran could use uranium enrichment to make nuclear weapons but Tehran insists that it wants only to produce atomic energy.

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Iran, EU and US to hold nuclear talks in Geneva
Iranian, European and US officials were to meet here Saturday for talks on Tehran's nuclear programme with all sides voicing optimism that there would be a positive outcome.

Saeed Jalili, Iran's top nuclear negotiator, will meet the European Union foreign policy chief Javier Solana to discuss a package of incentives offered by world powers to Tehran.

And, in a major policy shift by Washington, US Under-secretary of State William Burns will be at the talks.

US Secretary of State Condoleezza Rice on Friday said the decision to send Burns showed that Washington was "very serious" about diplomatic efforts despite the Bush administration's often harsh tone against Iran.

"This decision to send Undersecretary Burns is an affirmation of the policy that we have been pursuing with our European allies ... for some time now," Rice said.

"It is, in fact, a strong signal to the entire world that we have been very serious about this diplomacy and we will remain very serious about this diplomacy."

Washington has long said it will not negotiate with Iran until it first suspends uranium enrichment and insisted that Burns was travelling to Geneva to listen to Iran's response and not negotiate.

Nonetheless, it will be the first time that the United States, which severed relations with Iran in 1980 after the Islamic revolution, will be present in the negotiations aimed at persuading Tehran to freeze uranium enrichment.

Western countries suspect that Iran is secretly trying to develop the atomic bomb and the United Nations has slapped several sets of sanctions on Tehran over its refusal to halt enrichment.

Iran vehemently denies seeking nuclear weapons, insisting that its programme is designed to provide energy for its growing population for the time when its reserves of fossil fuels run out.

Jalili on Friday expressed optimism that the weekend talks would be constructive, provided Washington came with the right approach.

"What is important for us is with what approach they come to the talks. If it is with a constructive approach, and that they refrain from past mistakes, then for sure we will have constructive talks," he was quoted as saying by the official IRNA news agency before leaving Tehran for Geneva.

Jalili, who heads Iran's Supreme National Security Council, is accompanied on this trip by Ali Bagheri, the council's deputy head in charge of international affairs.

Foreign Minister Manouchehr Mottaki on Friday welcomed as "positive" the US presence at the Geneva talks.

The US participation is "a new positive approach," Mottaki said after talks in Ankara with his Turkish counterpart Ali Babacan.

"I hope this progress (in the format) will also reflect on the content of the talks," he said. "If the negotiations continue in this way, I hope there will be a positive outcome."

Also present will be representatives from the P5 plus one group: Britain, China, France, Russia, the United States -- the five permanent members of the UN Security Council -- and Germany.

On Thursday, Solana and Burns met in Brussels in preparation for the weekend talks.

"Mr Solana told Mr Burns that his participation could only have a positive impact," said spokeswoman Cristina Gallach. "We hope the Iranians are going to understand the importance of this decision" to attend.