Iran says to work closely with U.N. nuclear watchdog VIENNA (Reuters) - Iran's new envoy to the U.N. nuclear agency said on Thursday he would cooperate with it to find a way to "overcome existing issues once and for all," potentially signaling a more flexible approach from Tehran's new administration. But Ambassador Reza Najafi, at his first board meeting of the International Atomic Energy Agency (IAEA), also repeated Iran's position that it would not give up what it sees as its legitimate right to a peaceful nuclear energy program. "Based on its rights and obligations recognized under the NPT (Non-Proliferation Treaty), Iran is ready to faithfully engage and remove any ambiguity on its nuclear activities," Najafi told the governing board of the Vienna-based U.N. agency. Iran is at loggerheads with Western powers in particular, who fear its nuclear program may be designed to give it the capacity to build nuclear weapons. Tehran denies the accusation. Separately from big power efforts to resolve a decade-old dispute that could trigger a Middle East war, the IAEA has held 10 rounds of talks with Iran since early 2012 in a bid to resume a stalled inquiry into suspected atom bomb research. The negotiations have so far failed to yield results but a meeting is set for September 27 in Vienna, seen by Western states as a key test of the new Iranian government's intentions. Najafi, who was appointed to the Vienna post after President Hassan Rouhani took office in early August, said there was a strong political will on the Iranian side to "constructively interact" on the nuclear issue. "We are looking forward to working closely with the Director General (IAEA chief Yukiya Amano) and his team in the coming days," Najafi, a soft-spoken career diplomat and disarmament expert, said. Asked whether he was hopeful that an agreement could be reached in the Vienna meeting, he later told a brief news conference: "We sit together, we directly and frankly discuss the differences. We hope that we can solve those differences. Western diplomats welcomed his statement as a change in tone but cautioned it remained to be seen whether there would also be a change in substance following the June election of Rouhani, a relative moderate, to replace conservative Mahmoud Ahmadinejad. They said Najafi's remarks - though short on specifics - were more matter of fact than those of his predecessor, Ali Asghar Soltanieh, who often used the IAEA board meetings to rail against Tehran's Western foes and the U.N. nuclear agency. Iran says it is enriching uranium only for civilian energy and medicine, denying any aim to acquire nuclear weapons. Rouhani, who has vowed that Iran will be more transparent and less confrontational in talks both with the IAEA and the big powers, said this week that the time for resolving Iran's nuclear dispute with the West was limited. He said he would meet with the foreign ministers from some of the six powers - Russia, China, France, Britain, the United States and Germany - when he attends the U.N. General Assembly in New York this month. Iran is ready for "meaningful, result-oriented and time-bound negotiations," Najafi said, calling on the West not to speak to Iran "with a language of threat or sanctions." Western powers, who have imposed toughening sanctions on Iran over the last few years, say they hope that the election of Rouhani will lead to a softening of Tehran's approach. But they stress that there is as yet no sign of Iran slowing its nuclear program. On the contrary, Western diplomats say, Iran has continued to expand its uranium enrichment capacity in recent months, potentially shortening the time it would need to produce sufficient highly-refined material for a bomb.