The talks, involving US Secretary of State John Kerry and his Iranian counterpart Mohammad Javad Zarif, came just after new Iranian leader Hassan Rouhani called on Israel to admit it has a nuclear bomb.

Chaired by EU foreign policy chief Catherine Ashton, the meeting brought together the foreign ministers of the five permanent members of the UN Security Council, Britain, China, France, Russia and the United States plus Germany in a group dubbed the P5+1.

Smiling broadly, Zarif was sat at the head of the table next to Ashton looking down on the Security Council conference room, with Kerry to the right on an abutting table.

Western powers have approached with caution the overtures made by the new Iranian leadership which took power in August.

"While we do not anticipate that any issues will be resolved during today's P5+1 meeting, we are hopeful that we can continue to chart a path forward," a US State Department official said.

"We hope that this new Iranian government will show that it is prepared to engage substantively to address these long standing concerns and we will see today and in months ahead whether they will follow words with action."

It is the first time that Iranian and American ministers have sat together at the talks, aimed at reining in the Islamic republic's nuclear program, which western nations believe is a covert grab for an atomic bomb.

Iran has repeatedly denied the accusations, saying its nuclear program is for civilian purposes only.

Rouhani said he believed a deal could be struck with the international community within three to six months.

And he said Iran's arch-foe Israel should join the Non-Proliferation Treaty, which aims to contain the spread of nuclear weapons. Israel has never declared a nuclear arsenal, but is widely assumed to have several bombs.

Rouhani, speaking as current leader of the Non-Aligned Movement at a conference on disarmament, highlighted the failure of attempts to organize a Middle East nuclear free zone.

"Israel, the only non-party to the Non-Proliferation Treaty in this region, should join thereto without any further delay," Rouhani told the meeting.

Kerry met early Thursday with his Chinese counterpart Wang Yi and the two men agreed "Iran should cooperate and should respond positively to the offer on the table," a US official told reporters.

The P5+1 made a new offer to Iran earlier this year, before Rouhani's election, on how to overcome the current stalemate in the nuclear dossier.

It is believed to have offered an easing of the international sanctions which have crippled the Iranian economy, in return for a slow down in Iran's uranium enrichment program.

Western officials say they are still waiting for a response. "No nation should possess nuclear weapons, since there are no right hands for these wrong weapons," insisted Rouhani.

"As long as nuclear weapons exist, the risk of their use, threat of use and proliferation persist. The only absolute guarantee is their total elimination," he said.

Rouhani told the Washington Post he wants a quick deal on the nuclear standoff adding he has the full backing of Iran's Supreme Leader Ayatollah Ali Khamenei.

"If it's three months, that would be Iran's choice, if it's six months, that's still good. It's a question of months not years," he said.

While US officials say no bilateral talks are planned between Kerry and Zarif, an unofficial encounter remained possible.

As he entered the room Kerry said he was "looking forward to a good meeting." Western diplomats say the meeting will give Iran a chance to show there is substance behind Rouhani's statements that he wants to end the nuclear showdown.

Zarif, who immediately tweeted a picture of him sitting at the table, said on his Twitter account: "We have a historic opportunity to resolve the nuclear issue," if world powers adjust to the "new Iranian approach."

The United States had sought a meeting between President Barack Obama and Rouhani on the sidelines of this week's UN assembly. But Iran said it was too complex to organise.