By Lisa Holland, Foreign Affairs Correspondent
World powers will meet Iranian nuclear negotiators in Kazakhstan this week for the first time in eight months.
It is understood there will be what diplomats are calling a "new offer" to the Iranians to try to make progress in the stalled nuclear stand-off.
A senior diplomat said: "We will take an offer with us. It is substantial and serious and will involve significant new elements."
Tehran insists its nuclear programme is for civilian energy and medical research.
The European Union and members of the UN Security Council including the US suspect Iran has a covert atomic weapons programme.
Washington and Brussels have adopted a dual-track approach to Iran - pursuing nuclear talks while pressing sanctions to try to force Tehran to make a deal.
A US proposal for a one-on-one meeting with Iran on the sidelines of the talks in the Kazak city of Almaty remains on the table.
President Mahmoud Ahmadinejad has defied Western pressure The diplomat told Sky News: "Iran has a great deal to gain from the talks. It wants sanctions lifted. The talks present an opportunity to re-shape relations.
"The prize is a great one, but the negotiations are difficult and complex. We have a good offer. We hope the Iranians will respond positively."
Negotiators hope the Almaty talks will give them some sense of whether the Iranians have any interest in genuinely pursuing diplomacy.
The diplomat said: "We have to be patient and make sure when the Iranians reach a point when they want to do a deal we are at the table."
Iran has seen elevated levels of inflation. Some suggest it is at 27%, while others think it could be double that.
The UN has passed six Security Council resolutions on Iran, and diplomats hope that the economic impact of sanctions will force the Iranians to re-think their stance against the West.
The Western thinking is that the centrifuges may keep spinning but the sanctions keep biting.
It has been more than half a year since the last round of talks with countries known as the E3 + 3 - the US, France, Britain, Germany, China and Russia.
There has been anxiety about a possible military strike on Iran's nuclear facilities by Israel.
Israel's Benjamin Netanyahu discusses Iran at the UN in September 2012 Iran is still expanding its nuclear programme with the installation of more advanced centrifuges which will multiply its enrichment capability.
But Iran has also reportedly converted some of its medium-enriched uranium into fuel plates for its medical reactor, making it harder to convert that material into bomb-grade fuel, and is slowing down its accumulation of what is known as 20% enriched uranium.
A new report by the international nuclear watchdog IAEA suggests that Iran has a stockpile of 167kg of 20% enriched uranium.
The 20% enriched uranium is seen as the barometer for proliferation concern as it could relatively quickly be further enriched into weapons-grade fissile material.
At the time of the last IAEA report three months ago, Iran had a stockpile of nearly 135kg of 20% uranium.
According to the watchdog, this means that Iran's 20% stockpile has increased by 32kg in the past three months - a growth rate of under 11kg a month.
At that rate Iran could take more than six months to reach a red line laid down by Israel of 240kg - which is in theory enough to make one nuclear warhead, if further enriched.
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