World powers gathered Monday for fresh talks with Iran on its controversial nuclear programme, seen as a test of a new mood since reputed moderate President Hassan Rouhani took office in August.

Iranian Foreign Minister Mohammad Javad Zarif was expected to have dinner with his European Union opposite number Catherine Ashton in Geneva Monday evening, on the eve of the two-day meeting of the "P5+1" group and Tehran's delegation.

Both sides downplayed expectations of a major advance, however. "I am not pessimistic about the talks but we need to see the good intentions and political will of the other side in action," Iranian media quoted Zarif as saying at Geneva airport.

He said the issue "cannot be resolved in one session", although there was potential to do so "within a year".

On Tuesday and Wednesday Ashton was to lead the negotiating team from the P5+1 -- the five permanent UN Security Council members Britain, China, France, Russia and the United States, plus Germany.

In a statement Monday, Ashton said she had come to Geneva "with cautious optimism but a real sense of determination", adding that the goal was to go into details of proposals and explore possibilities.

Zarif has so far refused to be drawn on what Iran might offer in return for relief from a trade embargo, which has badly hit the country's oil exports and its access to global banking.

"Our proposal has three steps... the initial one can be done within a month or two, or even less," he said Monday, without elaborating.

Earlier Zarif said he hoped that the Geneva meeting would at least sketch out a "roadmap" for further, higher-level talks.

Iran has been pressing for a pledge to ease sanctions that were slapped on it amid fears that what it claims is nuclear power development is really a drive to develop atomic weapons.

Tehran has already drawn its red lines, saying it will not accept any demand to suspend uranium enrichment or ship out stockpiles of purified material.

Ahead of the meeting with Iran's team -- expected to be led for the bulk of the talks by deputy foreign minister Abbas Araqchi -- a senior US administration official said it would come down to detail.

"We are quite ready to move. But it depends what they put on the table," the official told reporters.

"We are hopeful, but that has to be tested with concrete, verifiable actions," the official said.

"In the past, Iran has taken the negotiated time and just kept moving forward with its nuclear programme. We cannot allow that to be the case."

The official underlined that all involved appreciated the "change in tone" from Iran.

A first meeting between Zarif and his counterparts from the six powers took place last month on the sidelines of the UN General Assembly, accompanied by a landmark bilateral meeting with US Secretary of State John Kerry.

After meeting Ashton in London on Sunday, Kerry said the window for diplomacy with Iran was "cracking open".

Israel has repeatedly called on its US ally not to fall for "sweet talk" from the new Iranian president, insisting that actions not words are essential to ensure Tehran never acquires an atomic bomb.

Tackling such concerns, Kerry underlined Sunday that Washington meant what it said when it insisted it would never allow a nuclear-armed Iran.

"I believe firmly that no deal is better than a bad deal," he said.

Iran currently has 6,774 kilogrammes (15,000 pounds) of low-enriched uranium, and a lesser quantity of enriched uranium.

The enriched uranium is the source of the greatest concern for the West and Israel, which fear Tehran could divert some of it for further enrichment towards the level required for a nuclear weapon. (AFP)