A new round of talks between Iran and world powers over Tehran's nuclear programme will make or break the negotiations, a senior Iranian official said on Friday.

In a shift of policy, Washington is sending for the first time senior U.S. diplomat William Burns to join European Union foreign policy chief Javier Solana and officials from Britain, France, Germany, Russia and China for talks with Iran's chief nuclear negotiator Saeed Jalili on Saturday.

"These talks will clarify the fate of the negotiations. After the meeting, either negotiations will continue or it will fully stop," the Iranian official told Reuters.

When asked whether it meant Iran was ready to freeze any expansion of its nuclear programme in return for the U.N. Security Council halting further sanctions measures, the source said "not at all".

The senior Iranian official said Jalili has a full mandate from the country's Supreme Leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad to take any decision in the talks which he described as "crucial".

The powers are seeking a more detailed Iranian response to their enhanced offer of financial and diplomatic incentives to halt secretive nuclear activity that could yield atom bombs.

Iran has so far rejected to halt the sensitive work, describing it as a "red line" for the Islamic Republic.

The world's fourth-largest oil-producer says the aim of its nuclear programme is solely to generate electricity so that it can export more crude and gas.

Tensions with Iran have intensified, particularly since Tehran tested missiles last week, alarming Israel and pushing up oil prices. Washington responded to the tests by saying it would defend its allies against any possible attacks.

Solana said he hoped for a "constructive response" at his meeting with Jalili but that he could not guarantee success.

HOPING FOR POSITIVE TALKS

"From our view the approach of America is important," Jalili was quoted as saying by the official IRNA news agency before leaving Tehran.

Iranian Foreign Minister Manouchehr Mottaki said the new talks were positive and signalled good developments ahead.

The senior official, who asked not to be named, said Iran hoped the presence of U.S. envoy could bear positive results.

"As I said, Mr. Jalili has full authority to choose different paths in talks based on the involved parties' intentions," the official said.

Khamenei, Iran's highest authority who has the last say on major policies such as nuclear issue, said on Wednesday Iran would only enter negotiations with the observance of the country's "red lines".

Washington says Burns will not hold talks with Jalili separately and will not act as a negotiator at the Geneva talks, but would put forward the White House position that Iran has to give up enrichment for any real talks to start.

Washington also wants to underline that it favoured a diplomatic solution to the impasse.

Burns was involved in talks that led Libya to renounce terrorism and give up weapons of mass destruction in 2003, resulting in a thaw in relations and full diplomatic ties that were ultimately restored in May 2006.

Tehran and Washington cut diplomatic ties shortly after the Iranian Islamic revolution of 1979. But the United States has held several rounds of talks over the past year with Iran over what it sees as Tehran's meddling in Iraq.

Washington's shift of diplomacy towards Tehran from threats to diplomacy includes plans to open a U.S. interest section in Tehran after almost three decades. Iran is reviewing the issue.