The United States said Tuesday world powers are making progress on a package on incentives for Iran to halt sensitive nuclear activities, and a plan for penalties if it doesn't. Foreign ministers of the five permanent U.N. Security Council member countries and Germany meet in Vienna Thursday to try to finalize the package.

The effort to develop the so-called carrots-and-sticks approach to Iran has been slowed by differences among the major powers, with Russia and China understood to be resisting any early move to impose sanctions on Tehran.

However, the State Department says the differences are being whittled-down, and that chances for concluding an agreement at Thursday's Vienna ministerial meeting are, as one official here put it, pretty good.

Secretary of State Condoleezza Rice will represent the United States at the Vienna meeting, which was preceded by a lengthy telephone conference call by senior diplomats of the six countries Tuesday to lay the groundwork for the ministerial meeting.

The idea is to present Iran with the choice of trade and technological incentives for ending uranium enrichment, or punitive measures starting with a critical U.N. Security Council resolution and leading to sanctions.

Iranian Foreign Minister Manouchehr Mottaki said in Malaysia Tuesday his government was prepared to return without preconditions to nuclear negotiations with Britain, France and Germany that broke down last year.

White House Press Secretary Tony Snow declined to call the reported Iranian offer a political breakthrough but made clear the United States would welcome a renewal of the negotiations. "We're glad they're going back to the E.U.-Three talks and we hope that they produce productive results. We've always been clear on the end-state, which is that, you know, we want Iran to suspend all enrichment and reprocessing activities, and we wish them success," he said.

The White House spokesman said the U.S. approach to the stated Iranian willingness to negotiate would be, as he put it, to trust but verify.

Some European diplomats were reported to be skeptical about the Iranian move, since a senior Iranian nuclear official was quoted as saying in Tehran that the Europeans would have to accept certain irreversible realities with regard to Iran's nuclear program.

Iran has said its nuclear program is for peaceful purposes only, but that it has a right to enrich uranium and will not return to any freeze on such activity.

The United States and some European governments believe Iran has a covert nuclear weapons program.

State Department spokesman Sean McCormack reiterated Tuesday that a binding Security Council resolution under Chapter Seven of the U.N. charter demanding that Iran cease enrichment is a minimum U.S. requirement for the penalties side of the carrots-and-sticks package.

He also said the idea of the United States offering Iran security guarantees as part of the incentives is not on the table.