VIENNA - Talks between the UN atomic agency and Iran are expected to lead to a deal next month on resuming an investigation into Tehran's nuclear program, the chief UN inspector said after returning from Tehran on Friday.

Even though the UN International Atomic Energy Agency failed to gain access to the Parchin military site as requested, IAEA team leader Herman Nackaerts said progress had been made in Thursday's meeting in the Iranian capital.

World powers seeking to resolve a decade-old dispute over Iran's atomic activity and avert the threat of a new Middle East war had closely watched the IAEA-Iran talks for any indication of Iranian readiness to finally start addressing their concerns.

US ally Israel has threatened military action if diplomacy and economic sanctions intended to halt Iran's uranium enrichment work fail to resolve the standoff.

The IAEA and Iran will meet again on January 16, Nackaerts told reporters at Vienna airport.

"We expect to finalize the structured approach and start implementing it then shortly after that," he said, referring to a framework agreement that would allow the IAEA to restart its investigation into suspected atomic bomb research in Iran.

"We had good meetings," Nackaerts added. "We were able to make progress."

The IAEA said also after talks in May that it expected an agreement soon, but that failed to materialize.

Western diplomats, who often accuse Iran of stonewalling and playing for time in its dealings with the IAEA, are likely to react cautiously and tell Tehran it must engage in substance on the agency's inquiry and immediately grant it the access it needs.

"If the two sides are converging then that is good news, but we have now had so many false starts that there are grounds to be skeptical," said Shashank Joshi, a senior fellow and Middle East specialist at the Royal United Services Institute.

The IAEA - which said before the trip it hoped to go to the Parchin site - was unable to go there this time but it would be part of the "structured approach" accord, Nackaerts said.

The Vienna-based UN agency believes Iran has conducted explosives tests with possible nuclear applications at Parchin, a sprawling facility southeast of Tehran, and has repeatedly asked for permission to visit.

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Parchin visit will still be "useful" despite Iran cover-up work

Iran says Parchin is a conventional military site and has dismissed allegations that it has tried to clean up the site before any visit.

Western diplomats say Iran has carried out extensive work at Parchin in the past year, including demolition of buildings and removal of soil, to cleanse it of any traces of illicit activity. The IAEA says a visit would still be useful.

Nackaerts' comments about progress made were in line with those made by Iran's ambassador to the IAEA, Ali Asghar Soltanieh, to Iranian media after the one-day meeting in Tehran.

Iranian media also said a new meeting would take place in the capital Tehran on January 16.

Iran, one of the world's largest oil producers, denies Western allegations it is seeking to develop the means and technologies needed to assemble nuclear weapons.

Its economy is struggling with the burden of increasingly tough Western sanctions.

The IAEA's meetings with Iran are separate from - but closely linked to - broader efforts by six world powers to resolve the decade-long nuclear dispute.

Senior European Union and Iranian diplomats on Wednesday discussed the timing of possible new talks between Iran and Britain, France, Germany, United States, Russia and China.

The powers want Iran to curb its uranium enrichment program - work which can have both military and civilian purposes - and cooperate fully with the IAEA. Iran wants the West to lift sanctions hurting its oil-dependent economy.

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