VIENNA/BRUSSELS - The European Union told Iran on Monday it "must" suspend uranium enrichment, a few days after the Islamic state ruled out doing just that, as Tehran and the West engaged in diplomatic shadow-boxing ahead of nuclear talks this month.

The United States called on Iran to take "urgent practical steps" to build confidence during negotiations with world powers on Tehran's nuclear program, which Washington and its allies suspect is a bid to develop atomic bomb capability.

Iran, attending an international conference in Vienna alongside its Western foes, for its part accused the United States of supporting Israel's atomic activities. The Jewish state is widely assumed to hold the Middle East's only nuclear arsenal.

Iran and the six major powers resumed discussions last month in Istanbul after a gap of more than a year - a chance to ease escalating tension and avert the threat of a new Middle East war - and both sides described the atmosphere as positive.

The next meeting between the powers - the United States, France, Britain, China, Russia and Germany - and Iran is to take place on May 23 in the Iraqi capital. Iranian officials say they are "optimistic" about making progress.

But with Iran seeking an end to sanctions and Western states reluctant to ease the pressure they credit with bringing Tehran to the negotiating table, diplomats are already playing down the chances of a settlement in Baghdad.

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Western officials fear Iran may be hardening its demand for relief from sanctions which have been tightened over the past year to target its oil exports, and say the next round of talks will at best serve as a stepping stone towards a long-term deal.

They want to see Iran take firm action to allay their concerns over its nuclear program and curb its processing of uranium before considering relaxing punitive steps on Tehran.

"A lot of people are talking the Baghdad talks up. We are also hopeful. But it is important to remain realistic," one European diplomat said. "This will be a start, not an end."

The West wants verifiable assurances from Tehran that it is not seeking to develop atomic arms - for example, by accepting much more intrusive UN inspections and limiting its enrichment capacity.

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