A delegation led by Iran's top nuclear negotiator, Ali Larijani, was due to arrive in Moscow and go straight into closed-door negotiations with the Russian team led by security council chief Igor Ivanov.
The talks will center on a Russian plan to enrich uranium in Russia jointly with Tehran to use as a nuclear fuel in Iran, seen as a final attempt to defuse an international standoff ahead of a key meeting of the International Atomic Energy Agency (IAEA) next week.
Russia has also joined international calls for Iran to resume a moratorium on sensitive nuclear activities.
"We are optimists and consider we can come to an agreement with our Iranian interlocutors about returning Iran to the additional protocol," Putin said during a visit to Hungary on Tuesday.
"We can agree also on setting up a joint venture on Russian territory ... for enrichment of uranium for the nuclear industry of Iran," Putin told a news conference in Budapest.
The additional protocol of the nuclear Non-Proliferation Treaty (NPT) concerns the right of international inspectors to examine Iran's nuclear activities, a key demand from Western powers, which suspect Iran of trying to develop a nuclear bomb.
The United States and European Union countries accuse Tehran of seeking to build an atomic weapons capability under cover of a nuclear energy program.
Iran denies this and says that it wants only to produce electricity.
The Russian proposal is aimed at heading off international fears over Iran's intentions by taking the most sensitive steps in the nuclear fuel cycle out of Iran's hands until all the questions set by the IAEA have been answered.
Berlin and Washington have said that they are skeptical over Moscow's offer, while Beijing has said that it is willing to play a "constructive role" in negotiations.
In a confidential report this week, IAEA chief Mohamed ElBaradei said that Iran was pressing ahead with industrial-scale uranium enrichment and had failed to answer key questions over its nuclear program.
A meeting of the 35-member IAEA on March 6 is due to decide whether to move debate of the Iran nuclear issue to the UN Security Council, which can impose economic sanctions.
But Iranian officials on Tuesday said that they did not fear sanctions and insisted on the Islamic republic's right to carry out nuclear research, sticking to a tough line despite overwhelming international pressure.
Moscow's proposal "must include a guarantee that nuclear fuel will be supplied to Iran, [allow] research activities to continue and recognize Iran's right to conduct industrial-scale research", Hossein Entezami, spokesman for Iran's security council, said.
In an interview published in this week's edition of the US weekly magazine Time, Larijani said that Iran would not back down in the fact of the West's threats to haul it before the Security Council.
"If they think that we are going to surrender by threats of being referred to the [UN] Security Council, they are making a mistake," Larijani told Time.
Russia is building Iran's first nuclear reactor, outside the southwestern city of Bushehr, and has long-standing economic links with Iran that some experts say may help persuade Iranian leaders to compromise on the nuclear standoff, despite tough talk from Tehran.
One key concern expressed by the Iranian side has been national security and Russia on Tuesday held out the possibility of giving the Islamic republic a place in a Central Asian security organization led by Russia and China - two key partners of Iran.
Ahead of the Moscow talks, the US ambassador to the Vienna-based IAEA, Gregory Schulte, said that Iran's nuclear effort was "not a peaceful program ... This is why Iran's leaders have lost the confidence of the international community."
MOSCOW - An Iranian delegation arrived in Moscow on Wednesday for high-stakes talks with Russian officials on a plan aimed at heading off fears that the Islamic republic is trying to build nuclear weapons, an AFP photographer at the airport said.
The delegation was scheduled to proceed directly into meetings with officials of the Russian national security council, headed by Igor Ivanov.
The talks were aimed at reaching an agreement under which uranium for use in Iran's nuclear power program would be enriched through a joint Russian-Iranian venture located on Russian territory until questions about Iran's nuclear intentions are fully resolved.
© 2006 Agence France-Presse
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