The powers are seeking a more detailed Iranian response to their enhanced offer of financial and diplomatic incentives to halt secretive nuclear activity which the West fears is a cover for making bombs. Tehran says it is aimed solely at generating electricity.
A senior Iranian official said the Geneva talks would be pivotal in deciding whether diplomacy could succeed.
"These talks will clarify the fate of the negotiations. After the meeting, either negotiations will continue or it will fully stop," the official told Reuters.
However, when asked whether it meant Iran was ready to freeze any expansion of its nuclear programme in return for the U.N. Security Council halting further sanctions measures against it, the source said "not at all".
The U.N. has imposed three sets of sanctions on Iran over its nuclear programme.
TENSIONS
Tensions with Iran have intensified, particularly since Tehran tested missiles last week, alarming Israel and pushing up oil prices on fears that conflict could disrupt supply. Washington responded to the tests by saying it would defend its allies against any possible attacks.
Oil prices fell 10 percent earlier this week on signs of an easing of tensions between Iran and the West and worries that high prices and a weaker U.S. economy will undermine demand.
Traders were mindful on Friday that oil prices could retreat further if the talks made progress.
The Bush administration said it was not changing its stance that it will join full-blown negotiations with Iran only if Tehran first shelves uranium enrichment work, which can have both civilian and military uses.
Iran has repeatedly refused to stop its most sensitive nuclear work, as the six powers say it must do before formal talks can begin on the package of economic and other benefits.
Even for preliminary talks on the offer, they say Tehran must freeze any expansion of its nuclear programme in return for the U.N. Security Council halting further sanctions measures.
