Tehran has "no reason" to suspend its enrichment of uranium to 20 per cent -- one of the key demands of world powers engaging Iran in talks -- the head of its Atomic Energy Organisation said.

"We have no reason to cede on 20 percent, because we produce only as much of the 20 percent fuel as we need. No more, no less," Fereydoon Abbasi Davani was quoted as saying late yesterday by the ISNA and Mehr news agencies.

The issue of Iran's enrichment of uranium to 20 per cent, and its stockpile of that uranium, were at the centre of talks on Wednesday and Thursday in Baghdad between Iran and six world powers (Britain, China, France, Germany, Russia and the United States).

Those talks neared collapse when the world powers, known as the P5+1, demanded Iran give up that activity and its stockpile in exchange for some inducements such as aircraft parts for its dilapidated commercial fleet.

Iran, which is suffering under Western sanctions, said the inducements were far too little and countered with a demand that the powers declare that it has a right to enrich uranium.

With that impasse, the talks teetered on failure and were saved only by last-minute wrangling that agreed to give negotiations another shot in Moscow on June 18-19.

Abbasi Davani was quoted as saying that Iran had now joined the small group of countries "that can produce fuel for others."

He added: "It is better that others engage us about providing (them) with fuel, not that they (the West) demand we shut down our fuel production."

According to the latest report by the International Atomic Energy Agency, Tehran has produced 145.6 kilogrammes of 20-per cent enriched uranium, of which nearly a third has been converted into fuel for its research reactor. PTI