Senior diplomats of the five permanent U.N. Security Council member countries plus Germany will convene in London Wednesday to discuss next steps in the confrontation over Iran's nuclear program. The meeting was postponed from last week amid reports of disagreements among the major powers over how to proceed.

Nicholas Burns (file photo)

Undersecretary of State for Political Affairs Nicholas Burns will represent the United States at the London talks, which will include bilateral contacts Tuesday and the full six-nation meeting on Wednesday.

The five veto-wielding Security Council member countries and Germany will discuss proposed European trade and technology incentives for Iran to halt uranium enrichment and return to nuclear negotiations.

U.S. and European diplomats hope to be able to present Iran soon with a choice of either accepting the incentives and curbing its nuclear program, or facing a Security Council resolution demanding Iranian compliance and leading to possible sanctions.

The six-nation political directors meeting was postponed twice last week, amid reports of differences between the United States on one hand and Britain, France and Germany on the other over the content of the incentives package.

Russia and China meanwhile are reported to be reluctant about supporting a binding Security Council resolution against Iran or follow-on sanctions if Iran, as it has indicated it will, spurns the incentives.

Secretary of State Condoleezza Rice said Sunday the United States is not prepared to offer Iran security guarantees and has not been asked to do so, despite European statements that the incentives package should deal with security issues.

The New York Times reported Monday that the Bush administration, in advance of any U.N. sanctions move, has begun pressing European banks to curb dealings with Iran, backed by threats of fines and other penalties against their U.S. subsidiaries.

Asked about the alleged pressure tactics, State Department acting spokesman Tom Casey would not confirm any specific contacts with the banks and said the institutions themselves are beginning to understand the risks associated with doing business with Iran:

"They're making some pretty clear decisions on their own that are based on their business concerns, and based on an assessment of whether they really want to be associated with a country, and doing business with a country, that's engaged in, actively seeking a nuclear weapon, that's actively defying the international community," said Tom Casey. "And so I think what we're seeing is an example of how Iran is isolating itself."

While the United States has long maintained that Iran has a secret nuclear weapons program, Tehran says its nuclear efforts are entirely peaceful but that it will not give up what it says is its right to enrich uranium for reactor fuel.

Secretary of State Rice is due to discuss the issue here Wednesday with International Atomic Energy Agency Director-General Mohamed ElBaradei.

The U.N. watchdog agency has not flatly accused Iran of seeking nuclear weapons, but has cited a long record of Iranian deception and incomplete disclosures about its program.