BAGHDAD - World powers will seek concessions from Iran over its higher grade uranium enrichment at talks in Baghdad on Wednesday, a spokesman for EU foreign policy chief Catherine Ashton said.

The six global powers hope to see progress in the negotiations over Tehran's contested nuclear program, but do not expect a "dramatic happening" on Wednesday, Ashton's spokesman Michael Mann told reporters after the talks started.

"We have a new offer on the table which addresses our main concerns about the Iranian nuclear program. The 20 percent enrichment question," he said. "We hope the Iranians respond positively and we can make progress today. You are not going to get a dramatic happening today, I don't think. We are going to make solid progress if things go well."

World powers began talks with Iran on Wednesday to test its readiness under pressure of sanctions to scale back its nuclear program, seeking to ease a decade-old standoff and avert the threat of a Middle East war.

The stakes could hardly be higher: global oil markets are edgy over sanctions on Iran's vital crude exports and the possibility of Israeli strikes against its defiant arch-enemy, which has threatened reprisals if it comes under attack.

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Wednesday's meeting between Iran and six world powers - the United States, Russia, China, Germany, France and Britain - was the second since diplomacy resumed in April in Istanbul after a 15-month hiatus, during which tensions soared.

The powers' overall goal is an Iranian agreement to measures that would allay suspicions it is trying in secret to design a nuclear weapon. Iran's priority in the negotiations will be to win relief from punitive economic sanctions.

Among the proposed steps will be an updated version of an idea first floated in 2009 that envisaged Iran shipping out the bulk of its stockpile of low-grade uranium - which is potential nuclear weapons fuel - in return for higher-enriched fuel for a medical research reactor in Tehran, a diplomat said.

Iran hopes for "good news"

Iranian Foreign Minister Ali Akbar Salehi, speaking to reporters in Tehran, said, "The ideas fielded to us speak of the fact that the other side would like to make Baghdad a success. We hope that in a day or two we can bring good news."

Salehi also warned that Iran would not bow to pressure. "Their policies of pressure and intimidation are futile. They have to adopt policies to show goodwill to solve this issue."

Russia said the Islamic Republic appeared ready for serious discussion of substantive steps to resolve the impasse in return for the phased removal of sanctions.

"We got the clear impression (in expert-level meetings ahead of the Baghdad talks)...that the Iranian side is ready to seek agreement on concrete actions" under a step-by-step process, Foreign Minister Sergei Lavrov said in Moscow.

The immediate aim of the six global powers is expected to be an Iranian agreement to shut down the higher-grade uranium enrichment that it launched two years ago and has since expanded in an underground plant at Fordow that, to Israeli alarm, would be largely impervious to attack from the air.

Producing such highly refined material in quantity shortens the time Iran might require to assemble a nuclear explosive.

Iran, the world's No. 5 oil exporter, says its nuclear energy program is a peaceful bid to generate more electricity for a burgeoning population. Tehran has repeatedly ruled out suspending enrichment as called for by several UN resolutions.

It has hinted at possible flexibility on the higher-grade enrichment of uranium, but analysts say Tehran would be unlikely to compromise much while sanctions remain.

Around 15,000 Iraqi police and troops were protecting the venue in Baghdad's fortified Green Zone, a frequent target of militant attacks. Tehran's suggestion of a meeting in troubled Iraq, whose leadership is friendly to Iran, was seen by some diplomats as a test of Western commitment to securing a deal.

"Istanbul was important because for us it was a test of the Iranians' willingness to engage. Baghdad should focus on concrete substance," a European diplomat said. "The ball is in their court. It is they who must make the first step."

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