Richard Beeston, Diplomatic Editor of The Times, explains the latest twist in the West's long running cat-and-mouse game with Iran.

How should we read the Iranian Foreign Minister's declaration this morning - is he rejecting the American offer out of hand?

No this is only the first response. The Iranians know that they have some time left to prepare a final answer. They will probably want to see the full package that will be presented by Britain, France and Germany.

It is important to recognise that in spite of the tough talk from Iran, many in the leadership believe that there is now an opportunity to cut a deal with Washington while it is weak and willing to talk. We probably will not know the real Iranian position until the 11th hour.

What chance is there of Iran agreeing to freeze enrichment of uranium?

This is clearly the biggest issue. President Ahmadinejad has repeated over and over that this is non-negotiable. But he also knows that there is international concensus among the five permanent members of the UN Security Council that Iran stop its enrichment work.

If they can present a united position, backed up by the threat of sanctions, it is hard to see the Iranians going it alone. As yet we have not seen a clear indication from either Russia or China that they are prepared to back economic sanctions against Tehran, which could hurt their trade with Iran.

Is the American offer to talk directly with the Iranians a surprise?

Yes it did come as a surprise and apparently Washington did not tell its European allies until just before the announcement. The Europeans have been pressing Washington to make the offer for weeks now but hawks in the administration are strongly opposed to such a move.

It is believed that Mr Bush was persuaded to change after meeting Tony Blair and Chancellor Angel Merkel who were recently in Washington. Clearly Condi Rice also had a crucial part to play in the policy change.

What can we expect from the Vienna meeting?

I think we will see the five permanent members of the UN Security Council plus Germany agreeing on the text of an offer to Iran. The deal will propose building a light-water reactor in Iran and guaranteeing nuclear fuel supplies.

Tehran would also be offered its first official face to face talks with Washington in a quarter of a century. But this will all depend on Iran suspending its uranium enrichment work.

If it fails to do that then a resolution is likely to be passed by the Security Council under Chapter 7 of the UN charter demanding that Iran halt its enrichment work. A follow-up resolution would be needed to take action, such as imposing sanctions.

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