Kofi Annan's visit to Iran takes place two days after the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), reported Tehran had failed to meet the UN Security Council's August 31 deadline to suspend sensitive work.

The United States, which accuses Iran of seeking atomic bombs, said on Friday it was consulting European governments about possible sanctions against the Islamic Republic, but the EU signaled it wanted to see more dialogue with Tehran which says its atomic activity is aimed at producing power.

EU foreign policy chief Javier Solana will meet Iran's chief nuclear negotiator, Ali Larijani, next week to try to clear up ambiguities in Tehran's 21-page reply to the major powers' offer of broad cooperation if it stops the activities that could ultimately produce atomic weapons.

Slovenian Foreign Minister Dimitrij Rupel said after the 25 EU ministers discussed the Iranian issue in Finland on Saturday: "We give Solana two weeks for his clarification talks."

But Solana told reporters: "There's no deadline, whenever we finish ... We are going to start in the coming days and I hope that it will be very short. We don't need many meetings."

Other EU ministers said Solana would report back to them in Brussels on September 15 and they had agreed not to take any action against Iran before then.

So far Iran has given no sign it is prepared to meet the international community's condition for opening negotiations on economic, technological and political cooperation.

Iranian President Mahmoud Ahmadinejad remained defiant on Saturday and was quoted by the ISNA student news agency as saying: "Our nation is a supporter of peace but it will not retreat an iota from its right to nuclear technology."

Annan was expected to meet Iranian Foreign Minister Manouchehr Mottaki and Larijani, who is also the secretary of Iran's Supreme National Security Council, on Saturday.

Annan will press Iran to help shore up the Hezbollah-Israel ceasefire, but diplomats say the talks will also cover the nuclear confrontation.

In Finland, EU ministers declined to talk publicly of sanctions if Tehran did not comply on halting enrichment and stressed their preference for a solution through dialogue.