Six world powers and Iran began "substantive" talks on Tuesday in pursuit of a final settlement on Tehran's contested nuclear programme in the coming months despite caveats from both sides that a breakthrough deal may prove impossible.

Senior US and Iranian officials met separately for 80 minutes on the sidelines of the negotiations in Vienna.

Details were not given, but such bilateral talks were inconceivable before the 2013 election of Hassan Rouhani, a relative moderate, as president of Iran. US-Iranian dialogue is seen as crucial to any breakthrough nuclear agreement.

"The conversation was productive and focused mainly on how the comprehensive talks will proceed from here," a senior US State Department official said on condition of anonymity after Under Secretary of State for Political Affairs Wendy Sherman's meeting with Iranian Deputy Foreign Minister Abbas Araqchi.

Sherman headed the US delegation, while Iranian Foreign Minister Mohammad Javad Zarif and Araqchi led Tehran's negotiating team at the table with Britain, China, France, Germany, Russia and the US.

After Sherman's meeting with Araqchi, the Iranians met on Tuesday evening with all six powers to continue talks on how to approach future negotiations, diplomats said. The discussions will resume on Wednesday and could run into Thursday.

"Much of the first day was focused on discussions about process for how the comprehensive talks will proceed," a senior US official said. "We made clear that every issue is on the table as part of the comprehensive negotiations, and now it's time to dig into the details and get to work."

In the evening session between Iran and the six "substantive issues began to be discussed", the US official added.

A European diplomat said no decisions had been taken yet on how the talks will proceed in the future - the six powers led by the EU foreign policy chief Catherine Ashton want to get a deal done within six months.

"We had quite detailed discussions, productive and in a positive atmosphere," the diplomat said. "But this is day one and we have at least another day."

COMPLEX PROCESS AHEAD

The Americans and Iranians have played down expectations.

Iranian Supreme Leader Ayatollah Ali Khamenei, the man with the final say on all matters of state in the Islamic Republic, declared again on Monday that the talks "will not lead anywhere" - while also reiterating that he did not oppose the delicate diplomacy with the six world powers.

Hours later a senior US administration official also tamped down expectations, telling reporters on Monday that it will be a "complicated, difficult and lengthy process" and "probably as likely that we won't get an agreement as it is that we will".

It is the first round of high-level negotiations since a Nov. 24 interim deal that, halting a decade-long slide towards outright conflict, has seen Tehran curb some nuclear activities for six months in return for limited relief from sanctions to allow time for a long-term agreement to be hammered out.

The stakes are huge. If successful, the negotiations could help defuse many years of hostility between energy-exporting Iran and the West, ease the danger of a new war in the Middle East, transform power relationships in the region and open up vast new possibilities for Western businesses.

Araqchi sounded upbeat about the initial 40-minute discussions with the six nations but appeared to draw a line against Tehran's ballistic missile programme being addressed in any future talks. - Reuters