* Iran foreign minister says he "optimistic" about talks
* Says plans to increase output of fuel for research reactor
* Salehi says he won't run for president
* Western officials say yet to see steps to ease fears (Adds comment from separate interview)
VIENNA, Feb 28 (Reuters) - Iran's negotiations with world powers over Tehran's disputed nuclear programme reached "a turning point" this week, Iranian Foreign Minister Ali Akbar Salehi said on Thursday, suggesting a breakthrough was within reach.
"I call it a milestone. It is a turning point in the negotiations," Salehi told Austrian broadcaster ORF in an interview during a visit to the Austrian capital for a United Nations conference.
"We are heading for goals that will be satisfactory for both sides. I am very optimistic and hopeful," he said, according to a German translation of remarks he made in English.
Salehi, who had said on Wednesday he was "very confident" an agreement could be reached, gave no details of the talks in Kazakhstan, but said the fact that discussions would resume in a month showed the process was moving forward.
In a separate interview with the Austria Press Agency (APA), Salehi was asked about Iran's enriching uranium to 20 percent purity, a bone of contention with the West.
Iran says it has a sovereign right to enrich uranium for peaceful purposes, and wants to fuel nuclear power plants so that it can export more oil.
But 20-percent purity is far higher than that needed for nuclear power, and rings alarm bells abroad because it is only a short technical step away from weapons-grade uranium. Iran says it produces higher-grade uranium to fuel a research reactor.
Salehi said nearly 100 kg (220 lb) of the roughly 250 kg of uranium Iran has enriched to 20 percent purity so far had been processed into fuel plates for the research reactor.
"So far we have produced two of these plates per month. In the future we want to produce three, four or perhaps even more fuel plates every month. This is how we want to reduce the supply of 20 percent enriched uranium in the medium term," he said.
Iran has struck an upbeat tone after the talks ended with an agreement to meet again, but Western officials said it had yet to take concrete steps to ease their fears about its nuclear ambitions.
Rapid progress was unlikely with Iran's presidential election, due in June, raising domestic political tensions, diplomats and analysts had said ahead of the Feb. 26-27 meeting in the Kazakh city of Almaty, the first in eight months.
Asked by APA if he would run for president, Salehi said: "No, I do not feel fit enough for this job."
The United States, China, France, Russia, Britain and Germany this week offered modest sanctions relief in return for Iran curbing its most sensitive nuclear work but made clear that they expected no immediate breakthrough.
In an attempt to make their proposals more palatable to Iran, the six powers appeared to have softened previous demands somewhat, for example regarding their requirement that the Islamic state ship out its stockpile of higher-grade uranium.
U.S. Secretary of State John Kerry has called the talks "useful" and said that a serious engagement by Iran could lead to a comprehensive deal in a decade-old dispute that has threatened to trigger a new Middle East war.
Salehi played down in the APA interview the effect of international sanctions on Iran.
"Sanctions disturb the economy but cannot weaken it in a lasting way. One thing should be said to the West: whenever the sanctions were tightened, we developed new methods to cope with the consequences of the sanctions," he said. (Reporting by Michael Shields; Editing by Michael Roddy)