* World powers watching Iran-IAEA talks closely
* IAEA wants access to Parchin military site
* Iran says Parchin has nothing to do with nuclear work
By Marcus George and Fredrik Dahl
DUBAI/VIENNA, Jan 16 (Reuters) - Senior U.N. nuclear inspectors will continue their talks with Iran for a second day on Thursday, hoping to reach a long-sought agreement to unblock an investigation into suspected weapons research in the Islamic state.
It was not clear whether the extension of the meeting in Tehran meant that headway had been made towards nailing down a framework deal giving the U.N. nuclear watchdog access to sites, officials and documents for its long-stalled inquiry.
The IAEA's immediate priority is to visit the Parchin military base southeast of Tehran, where it suspects explosives tests relevant for production of nuclear weapons may have taken place, perhaps a decade ago, accusations Tehran denies.
Iran denies Western accusations that it is seeking to develop a weapons capability, saying its nuclear programme is aimed only at power generation.
The Vienna-based International Atomic Energy Agency (IAEA) and Iran separately announced the continuation of their discussions that began on Wednesday. They gave no details.
The IAEA, whose mission is to prevent the spread of nuclear weapons, has been trying for a year to negotiate a so-called structured approach with Tehran on how to conduct the investigation.
"The continuation of the discussions ... has been planned for Thursday," the official IRNA news agency quoted a statement issued by Iran's supreme national security council as saying.
The IRNA report added, without giving details: "The IAEA negotiating team which arrived in Tehran on Tuesday night, held several rounds (of talks) with the Iranian team today."
In Vienna, IAEA spokeswoman Gill Tudor said: "The talks will continue on Thursday."
World powers are monitoring the IAEA-Iran talks for any signs as to whether Tehran, facing intensifying sanctions pressure, may be prepared to finally start tackling mounting international concerns about its nuclear activity.
WINDOW OF OPPORTUNITY?
The six powers - the United States, France, Germany, China, Russia and Britain - and Iran may resume their separate negotiations later in January to try to reach a broader diplomatic settlement. They last met in June.
Israel - a U.S. ally believed to have the Middle East's only nuclear arsenal - has threatened military action if diplomacy and economic sanctions intended to rein in Iran's uranium enrichment programme do not resolve the stand-off.
After their previous meeting, in mid-December, both Iran and the IAEA said progress was made and the U.N. agency said it expected to finalise the deal in this week's talks. But Western diplomats later said some key sticking points remained.
Western diplomats say Iran has worked for the past year to remove any incriminating evidence from Parchin, but IAEA chief Yukiya Amano said late last year a visit would still be useful.
Before leaving Vienna, IAEA Deputy Director General Herman Nackaerts said his team was ready to visit Parchin immediately if access were granted.
Tehran says a framework accord with the IAEA should be reached before any visit to Parchin is allowed. It says the site is a conventional military facility and has dismissed accusations of ongoing "sanitisation" there.
Western diplomats voiced scepticism in the run-up to Wednesday's talks that a breakthrough was in the offing. Even if there were a deal, they said, it would be remained to be seen how it was implemented in practice.
But analysts and diplomats still see a window of opportunity for world powers to make a renewed diplomatic push to find an overall negotiated solution to the dispute after U.S. President Barack Obama won re-election in November.
The six powers want Iran to scale back its uranium enrichment programme and cooperate fully with the IAEA. Iran wants the West to first lift sanctions hurting its economy.