Sept. 13 (Bloomberg) -- European and U.S. envoys said Iran still has the chance to resolve a dispute over its nuclear aims through diplomacy, signaling that an attempt to impose sanctions at the United Nations Security Council may be on hold.

``We continue to extend an open hand to Iran,'' read a statement from Britain, France and Germany issued in Vienna. The European group, known as the EU-3, said its discussions with Iran are aimed at ``paving the way for a diplomatic solution and a long-term comprehensive arrangement.''

The U.K. and France are the chief partners of the U.S. among the permanent members of the Security Council.

While China and Russia have raised objections about imposing economic penalties on Iran to punish it for defying a UN demand to stop enriching uranium, U.S. Ambassador Gregory Schulte said that route should still be considered. ``The time has come for the Security Council to back international diplomacy with international sanctions,'' he said in a statement to the International Atomic Energy Agency in Vienna.

The EU-3 and other European nations are taking a more conciliatory approach than the U.S., according to Ambassador Peter Burian of Slovakia, one of 15 countries on the Security Council.

``If there is a credible process leading to stopping the enrichment and delivering what the Iranians have promised, then we are going to be quite patient,'' Burian said in New York. ``That is the European position.''

Annan's Caution

Secretary-General Kofi Annan weighed in today, saying the U.S. should delay pushing for sanctions while the EU holds talks with Iran that could produce the enrichment halt.

Annan's growing confidence in the talks adds to Chinese and Russian pressure on the U.S. to hold off introduction of a draft resolution that would impose sanctions.

``We should give the process a chance to move forward and run its course,'' Annan told reporters at the UN. ``It seems to be going well. The best solution is a negotiated one.''

Schulte said in Vienna he supports European Union foreign policy chief Javier Solana's talks with Iranian nuclear negotiator Ali Larijani and that even if sanctions against Iran are applied, they ``will not signal an end to diplomacy.''

About two hours after the statements were given at the IAEA, the EU said Solana and Larijani had called off a planned meeting tomorrow in Paris. Instead, the envoys will send subordinates to confer on an ``expert level,'' EU spokeswoman Cristina Gallach said in an interview.

Bomb Suspicions

The U.S. accuses Iran, which has the world's second-biggest oil and natural gas reserves, of trying to make a nuclear weapon. While Iran says its program is intended only to fuel power stations, the government hasn't granted full access to UN inspectors for checks of its research and production facilities.

The Security Council, in a July 31 resolution, ordered the country to halt uranium enrichment, a process that can be used for nuclear power or to make bombs.

The EU-3 said it was ready to ``suspend action'' against Iran once the country halts its uranium enrichment program. Iran stipulated in an Aug. 22 letter to Solana that it wasn't ready to negotiate as long as its case is before the UN's highest authority.

U.S. Secretary of State Condoleezza Rice said in a television interview yesterday that Iran must ``verifiably suspend'' enrichment. She sidestepped a question on whether a temporary halt would be enough for the U.S. to enter into talks.

Solana and Larijani engaged in two days of discussions about Iran's program Sept. 10-11 in Vienna. The diplomats tried to strike a compromise on the rules that would open talks about the atomic work. The EU is offering a U.S.-backed deal of trade and technology benefits in exchange for Iran suspending uranium enrichment.

The IAEA reported on Aug. 31 that Iran continues to enrich uranium in defiance of a Security Council deadline. The agency will continue to debate Iran's nuclear program tomorrow in Vienna.

To contact the reporter on this story: Jonathan Tirone in Vienna at jtirone@bloomberg.net.

Last Updated: September 13, 2006 14:50 EDT