Trump had said on Monday he was ready to meet with the Iranian president within weeks
President Hassan Rouhani Tuesday told the United States to "take the first step" by lifting all sanctions against Iran, dampening down the likelihood of meeting US counterpart Donald Trump.
And Foreign Minister Mohammad Javad Zarif said the prospects for such a meeting were "unimaginable" without Washington rejoining the nuclear deal with Tehran, two days after he made a surprise trip to Biarritz for talks on the sidelines of the G7 summit.
Trump had said on Monday he was ready to meet with the Iranian president within weeks, in a potential breakthrough reached during the summit in the French seaside resort.
Iran's economy has been battered by US sanctions imposed since Trump in May last year unilaterally withdrew from a landmark 2015 nuclear deal between the Islamic republic and world powers.
"The step is to retreat from sanctions. You must retreat from all illegal, unjust and wrong sanctions against the nation of Iran," Rouhani said in a speech aired live on state television.
"The key for positive change is in the hands of Washington," he said, because Iran had already ruled out ever doing what worries the US the most - building an atomic bomb.
"If honestly this is your only concern, this concern has already been removed" through a fatwa issued by supreme leader Ayatollah Ali Khamenei, said Rouhani.
"We don't intend to make an atomic bomb our military doctrine is based on conventional arms," said the Iranian president.
Khamenei issued a fatwa against nuclear weapons in 2003 and has reiterated it several times since.
"So take the first step. Without this step, this lock will not be unlocked," Rouhani said at an event in Tehran.
In Biarritz, French President Emmanuel Macron had said the "conditions for a meeting" between Trump and Rouhani "in the next few weeks" had been created through intensive diplomacy and consultations.
Trump, speaking at the final news conference of the G7 summit, said he "would certainly agree to that."
He added that the timeline proposed by Macron was realistic.
Trump was equally confident that Rouhani would be in favour.
"I think he's going to want to meet. I think Iran wants to get this situation straightened out," he added.
But Zarif said on Tuesday that he had made it known during the G7 summit that a meeting between Rouhani and Trump would be highly improbable even if the United States returned to the nuclear deal.
"On my trip to Biarritz I said that a meeting between Iran's president and Trump is not imaginable" until America rejoins the nuclear pact, said Zarif.
"Even at that time, we will not have a bilateral negotiation," added Zarif, who is now on a tour of Asia, in remarks aired on state television.
No photo opportunity
Rouhani has indicated he is open to holding talks with the Americans, but it is an approach that has faced criticism from ultra-conservatives in the Islamic republic.
In his speech on Tuesday, the Iranian president said his government's policy of "constructive interaction" with the world was in line with the supreme leader's approach of "extensive interaction."
But he stressed the United States had to "retreat from their mistakes" and return to commitments made under the nuclear deal.
"Our path is clear if they come back to their commitments, we too will fully act on our commitments. If they do not come back to their commitments, we will continue our path," said Rouhani.
But the Iranian president said he was not just looking for photo opportunities.
"We seek to resolve issues and problems in a rational way but we are not after photos. For anyone wanting to take a picture with Hassan Rouhani, this is not possible," he said.
The possible meeting between Rouhani and Trump was blasted as a photo opportunity Tuesday on the front page of the Javan newspaper close to Iran's Islamic Revolutionary Guard Corps.
Trump has put in place a policy of "maximum pressure" on Iran through crippling sanctions that critics see as raising the risk of conflict in the Middle East between the US and Iran.
Both Rouhani and Trump are scheduled to be in New York for the UN General Assembly at the end of September which could provide a stage for talks.