Foreign Secretary Jack Straw has told his Iranian counterpart that Tehran has a last chance to show its nuclear programme is peaceful.
Mr Straw is insistent that diplomacy is the way to resolve the crisis
Mr Straw met Manouchehr Mottaki in London on Wednesday amid continuing concern over Iran's nuclear plans.
The US, UK, Germany and France want Iran to be referred to the UN Security Council for censure over its programme.
The meeting comes after Iranian President Mahmoud Ahmadinejad set his country would not give into "bullying".
"He really needs to see this agreed position by the leaders of the international community, not as a threat, but as a final opportunity for Iran to put itself back on track...," he told BBC News.
"On track for absolutely certainly being able to produce electricity by nuclear power, but on track, too, for meeting its obligations which it entered into and says it's abiding by, not to do anything that could lead to the development of a nuclear weapons capability."
The talks were held because Mr Mottaki was in London for a conference of international donors about Afghanistan.
Warning on terrorism
Western powers are concerned about Iran's recent decision to resume research on uranium enrichment - a process that can lead to a nuclear weapons capability.
Mr Straw's meeting comes after US President George Bush criticised Iran in his annual State of the Union speech.
Mr Bush described Iran as a nation "held hostage by a small clerical elite that is isolating and repressing its people".
He urged Iranian citizens to assert their freedom from their rulers, and said "the nations of the world must not permit the Iranian regime to gain nuclear weapons".
Mr Bush said Iran must stop sponsoring terrorists in the Palestinian territories and in Lebanon - a call echoed by Mr Straw.
"It is essential if Iran really wants to come out of the cold and into the fold of the international community that it ends it support for organisations they say are freedom fighters which frankly are terrorist organisations," said Mr Straw.
That meant ending support for Hezbollah military operations in Lebanon and for Hamas' terrorist activities, he said.
There was also some suggestion Iran was supporting Islamic Jihad in Palestine.
Atomic agency summit
Mr Straw admitted the pressure on the Iranian Government was not directly affecting its rhetoric.
The International Atomic Energy Agency (IAEA) will decide on Thursday whether to report Iran to the UN Security Council.
Iran has threatened to halt voluntary involvement with the agency, including checks of atomic sites, if it is referred to the council.
Chinese and Russian officials have also arrived in Tehran for talks about the nuclear issue, according to Reuters.
President Ahmadinejad dismissed Mr Bush's speech.
He said: "I am telling those fake superpowers that the Iranian nation became independent 27 years ago and... on the nuclear case it will resist until fully achieving its rights."