William Burns (r) is taking part in the talks with Iran's Saeed Jalili (l)
A senior United States official is taking part for the first time in international talks with Iran over its controversial nuclear programme.
The official, William Burns, is joining envoys from the EU and permanent members of the UN security council.
Their talks with top Iranian nuclear negotiator Saeed Jalili were expected to focus on incentives for Tehran to suspend uranium enrichment.
Mr Burns' attendance is being seen as a major shift in US policy.
The US and Iran have had no diplomatic relations since the 1979 Iranian Revolution and the taking of hostages at the US embassy in Tehran.
Formal contact between the two countries has been extremely limited, though last year they met at ambassadorial level to discuss security in Iraq.
'Freeze for freeze'
In addition to the US and Iranian envoys, the talks in Geneva's city hall are being attended by representatives from Britain, China, France, Germany, and Russia.
The aim is to find out how Iran will respond to an offer of economic incentives for Tehran to suspend its nuclear activities.
Iran says its nuclear programme is designed to meet its energy needs, and it is defying UN Security Council demands to halt uranium enrichment.
As the talks began in Geneva, senior Iranian official Keyvan Imani restated his country's position that a suspension was "out of the question".
However the BBC's Bethany Bell in Geneva says the Iranians might be considering whether to stop increasing their enrichment.
Diplomats are pushing for a so-called "freeze-for-freeze" formula, under which a freeze of Iran's programme at its current levels would be matched by a Western pledge not to strengthen sanctions on Tehran.
Ahead of the talks, Iranian Foreign Minister Manouchehr Mottaki described them as "positive and constructive", and said he hoped a framework for future negotiations could follow.
Since 2002, when President George W Bush famously named Iran as one of the countries that formed the "axis of evil", his administration had insisted that no face-to-face talks would be held unless Iran suspended the enrichment of uranium, which it says could be used to produce nuclear weapons.
US officials say Mr Burns' presence will be a "one-time event" and that he is in Geneva not to negotiate but to listen.
With just six months left of his presidency, analysts say Mr Bush is taking a more pragmatic approach.
Secretary of State Condoleezza Rice seemed to sum up the new conciliatory mood in a speech on Friday.
She reiterated that Iran was "a difficult and dangerous state" before adding: "We have been very clear that any country can change course."
Recent reports have suggested the US may even consider opening a diplomatic mission in Tehran - which would be the first such link since the US hostage crisis nearly 30 years ago.
The talks come after weeks of rising tensions in the region.
The Iranians test-fired missiles last week, and a series of threats and counter-threats between Iran and Israel has been watched nervously in the West.