Talks between world powers and Iran have started in Baghdad in an effort to negotiate an agreement over disputes involving Iran's controversial nuclear program.

Wednesday's meeting brings together Iran's nuclear negotiator with representatives of the so-called P5+1: Britain, China, France, Russia, the United States plus Germany.

At issue is Iran's production of highly-enriched uranium that Western nations fear could ultimately be used to make a nuclear bomb. Iran says its nuclear program is being developed for peaceful means.

The talks are being held in Baghdad's fortified Green Zone. It is the second meeting since diplomacy resumed in April after more than a year of delays. Amid increased hopes for a breakthrough, diplomats expect talks could go into a second, unscheduled day.

Saeed Jalili, Iran's lead negotiator, was quoted by Iranian news agencies as saying he hoped the talks could begin a “new era.”

“We sense that the West has realized that the time for using its pressure strategy is over,” Jalili said, according to the Fars and Mehr news agencies.

But some Western nations and Israel fear Iran could be using the talks as stalling tactic.

On Tuesday, the head of the U.N. nuclear agency said he expects Iran to sign an agreement with the International Atomic Energy Agency “quite soon” to allow inspections of nuclear facilities.

Western powers suspect Iran has engaged in atomic weapons research at the Parchin military complex and wants to inspect it. Tehran says Parchin is a conventional weapons facility and insists the Iranian nuclear program is peaceful.

White House spokesman Jay Carney called the announcement on a potential agreement a “step forward” but said Washington would “make judgments about Iran's behavior based on actions, not just promises or agreements.”

Israel sees a nuclear-armed Iran as a threat to its existence and refuses to rule out military action against the Iranian nuclear program.

Israeli Defense Minister Ehud Barak accused Iran of trying to create a false impression of progress with the IAEA before Wednesday's talks in Baghdad.

Iran's state-run news agency IRNA said Tuesday the national atomic energy organization has delivered domestically-made nuclear fuel to a research reactor in Tehran for the first time.

The report said two batches of the fuel were sent to the site and one was loaded into the reactor, but gave no time frame. There was no independent confirmation of the development.

Western diplomats and analysts have said the Iranian government sometimes exaggerates its nuclear progress to try to improve its bargaining position with world powers.