The United States in the next month will announce plans to establish a diplomatic presence in Tehran for the first time in 30 years, a British newspaper said on Thursday.

"The Guardian has learned that an announcement will be made in the next month to establish a U.S. interests section in Tehran, a halfway house to setting up a full embassy," the paper's Washington correspondent, Ewan MacAskill, said in its front-page, unsourced report.

Click here to read the Guardian's story.

"The move will see U.S. diplomats stationed in the country."

But senior U.S. diplomat Undersecretary of State William Burns said in testimony to Congress last week the United States has not cemented its decision.

The Guardian said the development was "a remarkable turnaround in policy by President George Bush, who has pursued a hawkish approach to Iran throughout his time in office."

In a break with past policy, the Bush administration is sending Burns to observe talks in Switzerland with Iranian nuclear negotiator Saeed Jalili.

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The move aims to underline America's resolve to peacefully prevent Iran from developing nuclear arms while exploiting perceived splits in the regime's hardline Islamic government.

"What this does show is how serious we are when we say that we want to try to solve this diplomatically," White House press secretary Dana Perino told reporters on Wednesday, a day after Bush signed off on dispatching Burns to the Geneva talks this weekend.

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Iran says its nuclear work is for peaceful power generation and not for the development of nuclear weapons as the West suspects, and it has rejected conditions it give up uranium enrichment.

At the meeting being led by European Union foreign policy chief Javier Solana, Jalili is expected to give Iran's definitive answer to incentives offered to Tehran last month by the United States and five other nations in exchange for its suspension of activities that can produce the ingredients needed for a bomb.

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The United States cut off diplomatic ties with Tehran during the 1979-1981 hostage crisis, in which a group of militant Iranian students held 52 U.S. diplomats hostage at the American embassy for 444 days.

On Sunday, President Mahmoud Ahmadinejad suggested Iran would consider any proposal by the United States for a U.S. interests section in the Islamic Republic, should one be forthcoming.

U.S. media have reported the State Department is considering opening an interests section that could mean U.S. diplomats returning to Tehran but operating under another country's flag.

Iran maintains an interests section at the embassy of Pakistan in Washington. Iranian Foreign Minister Manouchehr Mottaki said it serves the large Iranian community in the United States.