UN Veto Powers, Germany Reach Deal on Iran

The compromise reached at a meeting in Vienna essentially urges Iran to halt its uranium enrichment program in exchange for incentives offered by the world powers.

"I'm pleased to say that we have agreed a set of far-reaching proposals as a basis for discussions with Iran," British Foreign Minister Margaret Beckett said in a brief statement while surrounded by her colleagues late Thursday. She added that the group had agreed to resume negotiations with Tehran and halt Security Council action if Iran agreed to suspend uranium enrichment. Should Tehran reject the offer, further steps would be taken in the Council, Beckett said.

"We urge Iran to take the positive path and to consider seriously our substantive porposals, which will bring considerable benefits to Iran," she said, adding that ministers would now be presenting the details to the Iranians.

According to an early draft text seen by AFP news service, possible sanctions include an arms embargo on Iran -- something Russia, a key arms supplier to Iran, and China, a major consumer of Iranian oil, resist.

On the benefits side, the EU-3 proposal says world powers should help Iran build light water reactors for its civilian nuclear energy program. Diplomats in Vienna said one compromise could be for Iran to keep spinning centrifuges that enrich uranium but leave them empty of the feedstock uranium gas.

Iranian officials have indicated Tehran may be willing to limit itself to research-scale work using only a small number of centrifuges, the machines that spin uranium gas in order to refine it.

Deal follows US offer for talks

The agreement comes after US Secretary of State Condoleezza Rice said earlier this week that the US was willing to join multi-party talks with Iran if Tehran suspends uranium enrichment, the core process behind what Washington suspects is a covert atomic weapons program.

The US offer represents a major policy shift by the United States, 26 years after Washington broke off diplomatic relations with Tehran.

Diplomats in Washington and Vienna said the US offer to hold talks with Iran was linked to an effort to get China and Russia to ease categorical opposition to UN sanctions if negotiations stalled.

Iran insists on right to nuclear program

But Iranian officials, who insist they are only striving for peaceful atomic energy, on Thursday rejected the conditions laid down by Washington while saying they was willing to have negotiations.

"We support dialogue in a fair and unbiased atmosphere but we will not talk about our undeniable and legitimate rights, because this is the right of our people according to international laws and treaties," Iranian Foreign Minister Manouchehr Mottaki said.

US President George W. Bush meanwhile on Thursday warned of UN Security Council action if Tehran refused to suspend enrichment.

"It is going to be up to the Iranians to make their decision, and if they choose not to verifiably suspend we have laid the groundwork for an effective international response," he said.