Iraqi Foreign Minister Tareq Aziz was scheduled to meet with Red Cross President Cornelio Sommaruga on Wednesday, raising expectations of a prisoner exchange agreement with Iran.

A U.N. spokesman said Aziz would meet with the president of the Red Cross and would later issue a statement.U.N. Secretary-General Javier Perez de Cuellar said on arrival in Geneva on Sunday for fresh gulf peace talks that he was encouraged by the two countries' goodwill on the POW issue.

And Sommaruga said after meeting with the U.N. boss on Monday the Geneva-based humanitarian body was gearing up for a massive repatriation operation.

He said he was planning to meet both Aziz and his Iranian counterpart, Ali Akbar Velayati, to discuss the details of the operation involving an estimated 100,000 people captured during the eight-year war.

The talks have so far made no progress on other issues, but Perez de Cuellar said on Tuesday night that the two sides had given a very positive signal by agreeing that all future negotiations should be face-to-face.

A sense of urgency to bolster the August 20 cease-fire had caused them to agree to change the procedure - they had met directly five times in three weeks of previous talks, Perez de Cuellar said.

"We all feel that something has to be done soon," he said.

In nearly four hours of discussions between Velayati and Aziz on Tuesday, no new positions were put forth, he said.

"We are really at the beginning of this process. It's like boxing. It is the first round, and they are measuring each other up."

Asked if he expected to reach a breakthrough, the Peruvian-born mediator said, "That is my purpose. The two parties know very well I intend not to go back to New York empty-handed."