UN nuclear chief Mohamed ElBaradei has welcomed the move by the UN Security Council to hold off imposing sanctions on Iran over its nuclear programme.
Mr ElBaradei said compromises were needed on both sides
"The only solution to the Iran situation is a comprehensive package through dialogue, through negotiation," Mr ElBaradei said.
The US had said earlier this week that pursuit of a tough UN Security Council resolution on Iran would be delayed.
Tehran has so far ignored calls from the UN to suspend uranium enrichment.
"It is very good that the [UN] Security Council holds its horses," Mr ElBaradei said at a news conference in Amsterdam.
"I am very optimistic. I hope both sides will move away from the war of words. I hope the pitch will go down... we need compromises on both sides," the head of the International Atomic Energy Agency (IAEA) added.
The US and its European allies have been seeking a UN Security Council resolution that would oblige Iran to halt all uranium enrichment work or face further action - which could possibly include sanctions.
Mr Ahmadinejad has accused his critics of hypocrisy
But this week the US agreed to first let Europeans try to work out a plan to resolve the stand-off.
"We agreed...we would wait for a couple of weeks, while the Europeans design an offer to the Iranians that would make clear that they have a choice that would allow them to have a civil nuclear programme if that is indeed what they want," US Secretary of State Condoleezza Rice said.
Ms Rice said Iran could either defy the international community and face isolation and UN Security Council action or it could accept a path with a civilian nuclear programme that was acceptable to the international community.
Negotiators from the Council's five permanent members - the US, Russia, China, Britain and France - and also a German envoy plan to meet in London on 19 May to weigh a new package of incentives.
They are also expected to discuss possible penalties if Iran fails to halt enrichment activities.
Iranian President Mahmoud Ahmadinejad said earlier this week that Iran was prepared to have talks with anyone to resolve the dispute.
Mr Ahmadinejad repeated his assurance that the programme was for peaceful purposes only, accusing the West of hypocrisy in trying to deny Iran a nuclear energy programme.
The US suspects Iran of trying to secretly develop a nuclear weapon.