International Atomic Energy Agency members are in Iran to push for transparency about its disputed nuclear programme.
The five-member team, led by its global inspectorate chief Herman Nackaerts, arrived on Monday, a day after Tehran responded defiantly to tightened EU sanctions by halting oil sales to British and French companies.
Iran denies Western allegations that it is covertly seeking the means to build nuclear weapons and has again vowed no nuclear retreat in recent weeks, but also voiced willingness to resume negotiations with world powers without preconditions.
The IAEA have planned two days of meetings in another effort to extract answers from Iran regarding intelligence suggesting its declared civilian nuclear programme is a facade for developing bombs.
Nackaerts said on departure from Vienna that he wanted "concrete results" from the talks. His delegation was expected to seek, among other things, to question Iranian nuclear scientists and visit the Parchin military base believed to have been used for high-explosive tests relevant to nuclear warheads.
But Foreign Minister Ali Akbar Salehi dampened speculation about such visits when he told the student news agency ISNA that the IAEA officials would not be going to any nuclear sites. "No. Their work has just begun," Salehi said.
Diplomats doubted that the talks would bring a breakthrough.
"I believe most are rather sceptical concerning the outcome because, well, Iran had a chance at the last meeting and didn't seize it," a senior Western official said, referring to the last trip by the senior IAEA team to Tehran at the end of January.
Referring to last week's announcements by Iran of new nuclear advances, he said: "They send out the wrong signals that Iran is really willing to cooperate... We will wait and see what will come out of this meeting but we should be prepared that Iran might try some technical steps ... to appear cooperative without really providing the necessary cooperation."
The outcome of the discussions will have diplomatic repercussions because it could either deepen a stand-off that has stoked fears of war or provide scope to reduce tensions.
The European Union enraged Tehran last month when it decided to slap a boycott on its oil from July 1. Iran, the world's fifth-largest oil exporter, threatened to close the Strait of Hormuz, the main Gulf oil shipping lane, in retaliation and the United States signalled it would use force to keep it open.
The spiking tension has put upward pressure on oil prices.
On Sunday, Iran's oil ministry announced that it had stopped selling oil to French and British companies, although the move will be largely symbolic as those firms had already greatly reduced purchases of Iranian crude.
Deputy Oil Minister Ahmad Qalebani suggested the Western crackdown would backfire, saying that in targeting Iranian oil the West had achieved only a surge in crude prices from $103 a barrel to $120, "and it will reach $150".
In remarks carried by the official news agency IRNA on Monday, Qalebani also said that if other EU states continued "their hostile behaviour towards Iran, we will cut our oil exports to those countries ... Fortunately demand for Iran's crude has not decreased. Instead it has increased."
China, in rare criticism of one of its major oil suppliers, rebuked Iran over the move to bar sales to Britain and France. "We have consistently upheld dialogue and negotiation as the way to resolve disputes between countries, and do not approve of exerting pressure or using confrontation to resolve issues," Foreign Ministry spokesman Hong Lei told a news briefing when asked about the matter. China buys around 20 per cent of total Iranian oil exports.
The European Commission says the EU would not be short of oil if Iran stopped crude exports as it has enough stock to meet the bloc's needs for around 120 days. Industry sources said European oil buyers were already making big cuts in purchases from Iran months in advance of EU sanctions taking full effect.
French and Anglo/Dutch oil majors Total and Shell have been big buyers of Iranian crude but Total had already stopped buying from Iran and traders said last week that Shell had scaled back sharply.
Shell, which has declined comment on its trade with Iran, was one of the biggest consumers of Iranian crude globally, taking about 100,000 barrels daily into Europe and about the same amount to its Japanese subsidiary, Showa Shell.
Latest EU data, for the third quarter of 2011, shows that oil sales into Britain fell to zero and France imported 75,000 bpd, accounting for just 6 per cent of its crude oil imports.
Debt-ridden Greece is most exposed to Iranian crude disruption among EU countries.
Iran says its nuclear programme is entirely peaceful but its refusal to curb uranium enrichment, which can have both civilian and military ends, while shifting a key part of it to a remote mountain bunker protected from air strikes and continuing to restrict IAEA access, has raised concerns.
The United States and Israel have not ruled out using force against Iran if diplomacy and sanctions fail to rein it in, and there has been intense public discussion in Israel about whether it should attack Iran to stop it "weaponising" enrichment.
The top US military officer said on Sunday that a military strike would be premature as it was not clear that Tehran would put its nuclear capabilities to developing a bomb.
"I believe it is unclear (that Iran would assemble a bomb) and on that basis, I think it would be premature to exclusively decide that the time for a military option was upon us," said General Martin Dempsey, chairman of the U.S. military's Joint Chiefs of Staff.
He said he believed the Islamic Republic's government was a "rational actor".
Chinese Foreign Ministry spokesman Hong said using force would be the wrong answer. "Attacking Iran militarily would only worsen the confrontation and lead to further upheaval in the region," he said.
Israeli Deputy Prime Minister Dan Meridor, who also holds the intelligence portfolio, said the sanctions regime had been toughened to the point of causing "hysteria" in Iran.
"All this shows the pressure which this regime is under, but they have not yet decided to shut down their nuclear effort, so the struggle is on," Meridor told reporters in Jerusalem. "I think there is a chance of success (for sanctions) if it they are done with determination, persistence and leadership."
The West has expressed some optimism at the prospect of new talks with Tehran, particularly after it sent a letter to EU foreign policy chief Catherine Ashton last week promising to bring "new initiatives" to the table with six world powers without stating preconditions.
"In these negotiations, we are looking for a way out of Iran's current nuclear issue so that both sides win," Iranian TV quoted Foreign Minister Salehi as saying on Sunday. The last round of talks collapsed in January last year.
Oil is a pillar part of Iran's export revenues and an important lifeline for its increasingly isolated economy. Tehran has little refining capacity and must import about 40 per cent of its gasoline needs for domestic consumption.
Tighter sanctions, combined with high inflation, have squeezed the ability of working-class Iranians to feed themselves and their families, and this uncertainty will cloud a parliamentary election on March 2.