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* Iranian media say talks to be held in Istanbul

* Turkish PM says won’t comment as not yet confirmed

* Israel to accept focus on 20-pct enrichment as first

priority

* U.S., allies want end to high-level enrichment

* Iran’s Ahmadinejad says must continue on nuclear path

(Adds quotes from U.S. official, Iran’s Ahmadinejad and Turkish

PM Erdogan)

By Dan Williams and Marcus George

JERUSALEM/DUBAI, April 8 (Reuters) – The U.S. and its allies

are pressing for an end to Iran’s high-level uranium enrichment

and the closure of a facility built deep under a mountain as

talks on Tehran’s nuclear standoff with the West resume this

week.

Iranian media said the talks, which collapsed more than a

year ago, would be held in Tehran on Friday.

A return to the table, after more than a year of tightening

sanctions over what the West believes is a programme to develop

nuclear weapons, had been in doubt after Iran and the P5+1

countries – the United States, Britain, France, Russia, China

and Germany – released conflicting statements about the venue.

Tehran had earlier voiced concerns about holding them in

Turkey, whose opposition to Iranian ally President Bashar

al-Assad in Syria has angered the Islamic Republic.

“After weeks of debates, Iran and the six world powers

agreed to attend a first meeting in Istanbul,” the semi-official

Fars news agency reported, citing unnamed sources. State-run

English language Press TV carried the same report.

The Fars news agency also said the sides had agreed to a

second round of talks in Baghdad if there was progress in

Turkey. There was no immediate comment on the venue from the

world powers.

Turkey’s NTV news quoted Turkish prime minister Tayyip

Erdogan as saying: “It wouldn’t be appropriate to make a

statement on an issue that hasn’t been confirmed. As soon it’s

confirmed, we will immediately share this with you.”

Getting Iran to suspend high-level uranium enrichment and

close a nuclear facility built deep under a mountain near the

holy city of Qom are “near-term priorities” for the United

States and its allies, a senior U.S. official said on Sunday.

The New York Times said the United States and other Western

nations planned to demand Iran immediately close and ultimately

dismantle the Fordow facility and also would call for a halt in

the production of 20-percent enriched uranium.

The U.S. official told Reuters “20 percent and closing

Fordow are near-term priorities” for the Obama administration

and its international partners in dealing with Iran.

Iran says its nuclear programme is for power generation and

producing isotopes for medical purposes, but the U.N. Security

Council has demanded a full suspension of enrichment, both to

the 20 percent and the 3.5 percent level.

Iran has enough 3.5 and 20 percent-enriched uranium for

around four bombs if refined further to about 90-percent purity,

Western experts say.

Earlier on Sunday, Israel, which has also demanded an end to

all enrichment and has threatened attacks on its arch-foe’s

nuclear facilities if diplomacy fails, signalled it would

accept, as a first priority, the Western powers focusing on

stopping 20-percent enrichment.

“We told our American friends, as well as the Europeans,

that we would have expected the threshold for successful

negotiations to be clear, namely that the P5+1 will demand

clearly that – no more enrichment to 20 percent,” Israeli

Defence Minister Ehud Barak said in an interview with CNN’s

Fareed Zakaria GPS to be aired on Sunday.

Iran’s stocks of 20 percent-pure uranium should be removed

“to a neighbouring, trusted country”, Barak said, according to

an advance transcript of the interview.

EASE THE DEADLOCK

While Iran says it has a sovereign right to peaceful nuclear

technology, it has at times appeared more flexible regarding 20

percent enrichment, which it began in early 2010, and some

experts say that initially getting Iran to stop this

higher-grade work could open a way to ease the deadlock.

It is not clear what Iran would expect in return, but an

easing of some of the sanctions, which include an oil embargo by

the European Union, might be among them.

Asked about Barak’s comments to CNN, another Israeli

official confirmed that Prime Minister Benjamin Netanyahu’s

government was focusing lobbying efforts on Iran’s 20-percent

pure uranium, but said the long-term goal remained the ending of

all its enrichment work.

“The understanding that has emerged in our contacts with the

powers is that there should be a staggered approach,” the

official told Reuters on condition of anonymity.

There was scant encouragement from Iran to signal it was

ready for concessions.

In an address on Iran’s annual day to celebrate its nuclear

achievements, President Mahmoud Ahmadinejad warned Western

powers that Iran would continue its pursue swift scientific

progress.

“The nuclear industry is like a locomotive that can carry

other industries along with it. It is like the space industry

that has raised tens of sub-industries under it and it is clear

that we must continue on this path,” the Iranian state news

agency quoted him as saying.

“You are blind if you think you can block scientific growth

in Iran by martyring Iranian scientists,” he added referring to

the killing of four Iranian scientists since 2010. “Don’t think

you can stop this roaring river, and know that if you

assassinate one scientist, hundreds and thousands will take his

place.

The head of its parliamentary committee for national

security and foreign policy, Alaeddin Boroujerdi, said late on

Saturday that despite the climate of threats and sanctions, Iran

was proficient in all stages of enrichment from mining raw

uranium in Iranian mines, producing yellow cake (concentrated

uranium powder), to building centrifuges and injecting uranium

gas into them.

In February Iran announced it had loaded domestically made

fuel rods into the Tehran Research Reactor, which produces radio

isotopes for medical use and agriculture.

International sanctions are aimed at depriving the regime of

funds and technology to further the nuclear programme and are

squeezing its vital oil exports and government finances.

(Writing by Will Waterman; Editing by Giles Elgood)