While both sides have signaled readiness to revive diplomacy over Tehran's long-running nuclear dispute with the West, Washington wants to expand the talks to also cover Iran's ballistic missiles, support for armed groups around the region and "treatment of their own people", US Secretary of State Marco Rubio said.
Iran has said it wants Foreign Minister Abbas Araqchi and US Middle East envoy Steve Witkoff to discuss only nuclear issue in Muscat.
US President Donald Trump's son-in-law Jared Kushner, who helped mediate in Gaza ceasefire talks, is also due to take part in the talks.
"Iran enters diplomacy with open eyes and a steady memory of the past year. We engage in good faith and stand firm on our rights. Commitments need to be honored," Araqchi said on X on Friday.
Tehran's clerical leadership remains deeply concerned Trump may still carry out his threats to strike Iran after a military buildup by the US Navy near Iran.
In June, the US struck Iranian nuclear targets, joining in the final stages of a 12-day Israeli bombing campaign. Tehran has since said its uranium enrichment work has stopped.
The US naval buildup, which Trump has called a massive "armada", has followed a bloody government crackdown on nationwide protests in Iran last month, heightening tensions between Washington and Tehran.
Trump has warned that "bad things" would probably happen if a deal could not be reached, ratcheting up pressure on the Islamic Republic in a standoff that has led to mutual threats of air strikes.
"While these negotiations are taking place, I would remind the Iranian regime that the president has many options at his disposal, aside from diplomacy, as the commander-in-chief of the most powerful military in the history of the world," White House Press Secretary Karoline Leavitt on Thursday told reporters.
Iran has vowed a harsh response to any military strike and has cautioned neighbouring Gulf Arab countries hosting US bases in the oil-rich region that they could be in the firing line if they were involved in an attack. Iran has one of the Middle East's biggest stockpiles of ballistic missiles.
Negotiators in Oman will have to navigate Iran's red line on discussing its missile program to reach a deal and avert future military action.
Tehran has flatly ruled out talks on its "defence capabilities, including missiles and their range."
In a show of defiance, Iran's state TV said hours before the talks that "one of the country's most advanced long-range ballistic missiles, the Khorramshahr-4", had been deployed at one of the Revolutionary Guards' vast underground "missile cities".
However, Tehran is willing to show "flexibility on uranium enrichment, including handing over 400 kg of highly enriched uranium (HEU) and accepting zero enrichment under a consortium arrangement as a solution," Iranian officials told Reuters last week.
Iran also insists that its right to enrich uranium is not negotiable and demands the lifting of sanctions, reimposed since 2018 when Trump ditched Iran's 2015 nuclear deal with six powers.
The United States, its European allies and Israel accuse Tehran of using its nuclear program as a veil for efforts to try to develop the capability to produce weapons. Iran says its nuclear program is for peaceful purposes only.
