ISTANBUL - Iran and world powers discussed Tehran's controversial nuclear program for the first time in over a year on Saturday and, in what Western diplomats called a constructive development given their low expectations, agreed to meet again next month.

Catherine Ashton, the European Union's foreign policy chief who has headed negotiations for the six international powers including the United States and Russia, told a news conference after a day of talks in Istanbul that they had arranged to meet the Iranian delegation again in Baghdad on May 23.

Saeed Jalili, the chief Iranian negotiator, told a news conference there had been differences of opinion but that some important points had been agreed and that the next talks should focus on arranging measures to build mutual confidence. Iran has been hit by new waves of Western economic sanctions this year.

Western participants had said previously that agreeing to meet for a second round of talks would constitute a successful day. It may remove some heat from a crisis in which warnings from Israel of a possible strike against Iranian facilities have stoked fears of a major war in an already unsettled Middle East.

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After a day in which diplomats had spoken of a more engaged tone from Iranian officials compared to the 15 months of angry rhetoric on either side that has filled the hiatus since the last meetings, Ashton called the talks useful and constructive.

"We want now to move to a sustained process of dialogue," Ashton told a news conference, saying negotiators would take a "step-by-step" approach. "We will meet on May 23 in Baghdad."

"The discussion on the Iranian nuclear issue have been constructive and useful," she said. "We want now to move to a sustained process of serious dialogue, where we can take urgent, practical steps to build confidence."

The six world powers present were the five permanent members of the United Nations Security Council - Russia, China, the United States, France and Britain - plus Germany.

One non-Iranian diplomat called the atmosphere "completely different" from that of previous meetings, as Western delegates watched out for signs that Iran was ready to engage after more than a year of threats in defense of its right to pursue nuclear energy and denials it wants to be able to build an atom bomb.

Ashton told reporters in Istanbul that the negotiating powers wanted Iran to meet international obligations - it is a signatory to the treaty which prevents the spread of nuclear weapons - and should reciprocate in negotiations.

The talks were never expected to yield any major breakthrough but diplomats believed a serious commitment from Iran would be enough to schedule another round of talks for next month and start discussing issues at the heart of the dispute.

During the day's meeting, Deputy Foreign Minister Sergei Ryabkov, who is leading the Russian delegation, told Interfax news agency: "The atmosphere is constructive, the conversation is businesslike. As of the moment, things are going well."

"They met in a constructive atmosphere," said Michael Mann, a spokesman for EU foreign policy chief Catherine Ashton, after the morning session of talks. "We had a positive feeling that they did want to engage."

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