Israel fears that a jihadist offensive that has swept up swathes of Iraq may prompt concessions to arch-foe Iran from its longtime ally the United States.

"If Washington needs Tehran's help to solve the Iraq crisis, the United States will need to be more flexible in negotiations on Iran's nuclear programme," public radio cited a senior official as saying.

Racing against the clock, nuclear talks between Iran and six world powers appeared tough going Thursday with both sides warning of major differences as they tried to draft an accord.

The hoped-for agreement would see Iran scale back its nuclear program, in order to ease fears Iran wants atomic weapons, and avert a conflict in the Middle East.

Iran and world powers started drafting Wednesday a comprehensive nuclear agreement but still face many sticking points, Iranian Foreign Minister Mohammad Javad Zarif said.

"Today we have slowly begun to draft the final agreement... but there are still many differences" over the text, ISNA news agency quoted Zarif as saying from Vienna.

A top Iranian official said on Wednesday that Tehran could consider working with the United States over the crisis in Iraq if talks on its nuclear program are successful.

Asked about possible cooperation in Iraq, President Hassan Rouhani's chief of staff Mohammad Nahavandian told reporters in Oslo that the nuclear talks were a "test for confidence building".

Iran hopes to start drafting a nuclear agreement with world powers Wednesday but accepts tough negotiations lie ahead on a raft of issues, one of its top negotiators said.

Abbas Araqchi said Iran still hoped its differences with the six powers can be settled by a July 20 target date for a comprehensive deal, but that it "won't be a catastrophe" if the negotiations have to be extended for another six months.

Negotiators from Iran and six world powers sought Tuesday to overcome major differences and hammer out the text of a momentous nuclear deal just five weeks before a deadline.

This hugely complex accord would see the Islamic republic scale down its nuclear program to ease concerns that it wants atomic weapons -- something Iran has long denied.

Some 5,000 Iranians have pledged online to defend Iraq's Shiite Muslim holy sites against Sunni extremists who are waging war against the Baghdad government, a report said on Tuesday.

The pledges were made on the harimshia.org website, which was launched by a group naming itself the Popular Headquarters for the Defense of Shiite Shrines, the conservative website Tabnak reported.

The Islamist militant onslaught in Iraq raises the specter of a sectarian conflict spilling across the embattled nation's borders, U.N. chief Ban Ki-moon warned on Tuesday.

"I'm deeply concerned about the rapidly deteriorating security situation in Iraq, including the reports of mass summary executions by the Islamic State of Iraq and the Levant (ISIL)," Ban told reporters in Geneva.

Britain is to announce moves towards reopening its embassy in Tehran, the BBC reported Tuesday, as the West steps up its engagement with Iran amid rapid jihadist advances in neighboring Iraq.

The Foreign Office declined to comment on the reports but said Foreign Secretary William Hague would make a statement in the House of Commons at 1130 (1030 GMT).

British Foreign Secretary William Hague has spoken with his Iranian counterpart about the crisis in Iraq, the British government said on Monday.

Hague's telephone conversation with Foreign Minister Mohammad Javad Zarif comes amid reports that Tehran is considering providing military support to the Shiite-led administration in neighboring Iraq, which has come under assault from mainly Sunni militants.