The US Defense Secretary Mark Esper said on Friday that it appeared Iran was inching towards a place where talks could be held, days after US President Donald Trump left the door open to a possible meeting with Iranian President Hassan Rouhani.
Friction between the two countries has deepened since Trump last year withdrew from a 2015 international accord under which Iran had agreed to rein in its atomic programme in exchange for relief from economic sanctions.
Washington has renewed and intensified its sanctions, slashing Iran's crude oil sales by more than 80%.
"It seems in some ways that Iran is inching towards that place where we could have talks and hopefully it'll play out that way," Esper said at the Royal United Services Institute think-tank in London.
Asked at a press conference later what he was basing his comments on, Esper said it was "in light of some of the comments made by the Iranians in the wake of the G7."
He added: "'Inching' is subtle movements and I think that's a good thing."
Iran's foreign minister visited France briefly for side talks during the G7 summit of industrialised nations last month, although he did not meet Trump.
There was no sign of any softening in Iran's position on Friday, with Revolutionary Guards chief Hossein Salami saying "Iran will never negotiate with America, which is our enemy's (US) main goal and no one will help the enemy to achieve its goal", Iran's semi-official Fars news agency reported.
However Rouhani on Sept 3 said that while Iran would never hold bilateral talks with Washington, it could join multilateral talks between Iran and other parties to the accord if Washington lifted all the sanctions it reimposed on Iran.
The following day Rouhani gave European powers two more months to try to save the multilateral pact.
At the same time, Washington has rebuffed, but not ruled out, a French plan to give Tehran a $15 billion credit line.
Trump on Wednesday left open the possibility of a meeting with Rouhani at the upcoming UN General Assembly in New York.
Asked about the prospect, Trump told White House reporters anything was possible. "Sure, anything's possible. They would like to be able to solve their problem," he said, referring to inflation in Iran. "We could solve it in 24 hours."
The moves have suggested Iran, the United States and European powers may be leaving the door open for diplomacy to resolve a dispute over Iran's nuclear work, which the West has suspected was aimed at developing a nuclear weapon, even as they largely stuck to entrenched positions.
Iran denies ever having sought a nuclear bomb.
At the press conference with Esper, British defence minister Ben Wallace said Britain will always help the United States along a path to talks with Iran if a deal can be made, but Iran should be judged by its actions rather than words.
A senior US defence official said Esper and his French counterpart will discuss on Saturday how France's navy could coordinate with Washington to ensure freedom of navigation in the Strait of Hormuz.
Iran said on Friday it had taken a step to further downgrade its commitments to the 2015 deal with the world's most powerful nations, according to Iranian media, in retaliation for US sanctions reimposed on Tehran.
"We continue to believe that we need to be enforcing our sanctions to the maximum extent possible," the US official said when asked about Iran's decision to start developing centrifuges to speed up its uranium enrichment.
Germany, one of the signatories to the deal, reacted to Iran's decision on the centrifuges by saying it was not too late for Iran to change course.