Supreme leader Ayatollah Ali Khamenei said on Wednesday that Iran was ready for negotiations over the nuclear crisis but warned it would not step over any "red lines" in the search for a deal.

His comments came days ahead of a key meeting between Iran's top nuclear negotiator and the EU foreign policy chief, which will also be attended by a US envoy for the first time in a major policy shift by Washington.

Khamenei's intervention marked his first remarks on the five-year standoff since world powers last month presented a package aimed at ending a crisis which has raised fears of regional conflict and sent oil prices spiralling.

"Iran has decided to take part in negotiations but it will not accept any threat," state television quoted Khamenei as saying.

He said Tehran would not step over any "red lines", repeating Iran's insistence that it will not suspend uranium enrichment activities, which world powers fear could be used to make a nuclear weapon.

But Khamenei also appeared to give his wholehearted backing to the idea of talks.

"Our red lines are clear and if the other parties respect the Iranian people, the dignity of the Islamic republic and these red lines, our officials will negotiate as long as no one makes any threats against Iran."

Top Iranian nuclear negotiator Saeed Jalili and EU foreign policy chief Javier Solana are to meet in Geneva on Saturday to discuss the package, which offers Iran negotiations on technological incentives if it suspends enrichment.

In a major shift by the United States, Undersecretary of State William Burns will attend the meeting in Geneva, the first time a US official has joined talks with the Islamic republic over its nuclear drive.

Burns, the United States' third-ranking diplomat, will be in Geneva to listen to the talks but not to take part in the negotiations himself, US officials said.

"It's designed to press the advantage, show that we are serious about the diplomatic path, but that there are consequences if Iran doesn't accept the offer," a senior US administration official said.

"The Iranians have an opportunity here," the official told AFP.

President Mahmoud Ahmadinejad said on Monday that Jalili and Solana will discuss a "timetable" lasting a certain number of weeks in a bid to break the deadlock on the crisis.

World powers have offered to start pre-negotiations over a six-week period during which Tehran would add no more uranium-enriching centrifuges and in return no further sanctions would be imposed, according to some media reports.

Israel and the United States have both refused to rule out military action against Iran, which in turn has warned that any aggression against its soil will be met with a ferocious response.

"We have said clearly that if anyone takes any stupid action against Iran, our response will be decisive," Khamenei warned.

Khamenei said that even if US President George W. Bush ordered a military strike on Iran before leaving office "the Iranian people will pursue him and punish him even if he is not in power."

Iran last week intensified tensions in the nuclear standoff by staging two days of missile tests, which included the firing of a missile that it says can reach Israel.

Khamenei also gave strong backing to Ahmadinejad -- whose provocative comments on the nuclear crisis have caused controversy even inside Iran -- saying it was the president's job to speak on the issue.

"The supreme national security council, headed by the president, is responsible on the nuclear question.

"What the president and the officials say on the nuclear issue is the fruit of a consensus of all the country's officials," he said.

The OPEC oil cartel's number two producer vehemently denies the allegations it is seeking nuclear weapons, saying it wants only to generate nuclear energy for a population whose fossil fuels will eventually run out.