Powers Hope to Press Iran Back to Nuclear Talks

* Powers hope for reengagement with Iran over nuclear plans

* Iran remains defiant ahead of talks on Monday and Tuesday

* Breakthrough not expected from Geneva meeting

By Parisa Hafezi and David Brunnstrom

GENEVA, Dec 6 (Reuters) - Six world powers are due to hold their first talks with Iran in more than a year on Monday, hoping the meeting will lead to new negotiations over a nuclear programme the West believes is aimed at making atom bombs.

On the eve of the meeting in Geneva, Iran announced what it called a major step forward in its nuclear work, signalling it is not about to back down in a long-running battle over what it insists are peaceful plans for energy production.

The six powers -- Britain, China, France, Germany, Russia and the United States -- do not expect a major breakthrough during the Dec 6-7 discussions. Diplomats say they would view as a sign of progress an agreement to meet again for more substantial talks, perhaps early next year.

Western powers want Iran to suspend uranium enrichment activity, which can produce fuel for nuclear power reactors or provide material for bombs if refined to a higher degree.

However, Iranian President Mahmoud Ahmadinejad has said this key issue will not be discussed in Geneva.

Before the talks, U.S. National Security Council spokesman Mike Hammer said Washington and its allies were looking to see if Iran would enter into discussions "with the seriousness of purpose required to begin to address international concerns with its nuclear programme".

Asked upon his arrival in Geneva whether he was optimistic about the meeting, Iranian nuclear negotiator Saeed Jalili said: "Everything depends on the other party's attitude."

The West has tightened sanctions on Iran in recent months, and Western diplomats say these are hurting Iran's oil-dependent economy, which Tehran denies.

The United States has warned of more pressure and isolation if Tehran continues its uranium enrichment activities. Washington says all options, including military, remain on the table and Iran's arch enemy Israel has also not ruled out a military strike if diplomatic efforts fail.

IRAN REMAINS DEFIANT

Iran's hardline rulers, seeking to rally nationalist support and distract attention from economic woes, remain defiant.

On Sunday, Iran's nuclear energy chief Ali Akbar Salehi said Iran would use domestically produced uranium concentrates, known as yellowcake, for the first time at a key nuclear facility, cutting reliance on imports of the ingredient for nuclear fuel.

The timing of the announcement appeared aimed at showing Tehran's determination to pursue its nuclear plans before talks with the powers, whose negotiating team will be headed by European Union foreign policy chief Catherine Ashton.

Hammer said the announcement was not unexpected since Iran has been trying to develop its own uranium programme for years. But he said it called further into question Iran's intentions.

Salehi said Tehran would be taking part in the negotiations "with strength and power" and insisted the talks were for the benefit of the other countries, to allow them to find a way out of the political deadlock they had created by pressuring Iran.

Last week's killing of an Iranian nuclear scientist in Tehran, which Iran has blamed on Western intelligence services keen to impede its nuclear advances, could cloud the atmosphere for dialogue in Geneva.

Iran wants U.N. sanctions lifted, calling them illegal, and has accused the U.N. nuclear watchdog in Vienna of sending spies of foreign intelligence services to the country among inspectors who regularly visit its nuclear facilities.

(Writing by David Brunnstrom; Editing by Peter Graff)