VIENNA - The U.N. nuclear watchdog chief on Wednesday presented a draft deal to Iran and three big powers for approval by their capitals by Friday to allay fears Tehran might use an enriched-uranium stockpile to make nuclear weapons.

But uncertainty reigned whether Iran would endorse the draft deal calling on it to send most of its low-enriched uranium (LEU) reserve to Russia and France soon for conversion into fuel for a nuclear medicine facility in Tehran.

This would reduce the high risk cited by the West of Iran, under suspicion over nuclear secrecy and restrictions on U.N. inspections, covertly refining LEU to the high level of purity suitable for nuclear weapons.

Iran, which says its nuclear energy quest is only for electricity generation, already has accumulated enough LEU for one bomb if it were further enriched. Iran's enrichment program has approached industrial scale over the past year.

Iran's delegation chief said the Vienna talks presided over by International Atomic Energy Agency Director General Mohamed ElBaradei were constructive, but did not say whether the Iranian leadership would embrace the draft accord. We have to thoroughly study this text and ... come back and reflect our opinion and suggestions or comments in order to have an amicable solution at the end of the day, Ali Asghar Soltanieh, Iran's IAEA ambassador, said. We welcome this event, we are fully cooperating.

ElBaradei announced the draft agreement after 2 1/2 days of tense, high-stakes talks, plagued by delays, involving Iran, France, Russia and the United States at IAEA headquarters.

Diplomats said ElBaradei's draft contained the powers' call for Iran to send some 75 percent of its LEU before the end of this year for more refinement and processing into fuel rods to power a Tehran reactor producing radio-isotopes for cancer care.

The 1960s era reactor's fuel stock, provided by Argentina in 1993, is expected to run out in about a year because U.N. sanctions imposed over Iran's refusal to halt enrichment prohibit trade in sensitive nuclear materials with Tehran.

I have circulated a draft agreement that in my judgment reflects a balanced approach to how to move forward. The deadline for the parties to give, I hope, an affirmation action is Friday, ElBaradei told reporters.

I cross my fingers that by Friday we have an OK by all the parties concerned, he said, betraying the suspense over whether Iran would come on board after it cast doubt on details of the deal it tentatively agreed to in Geneva talks on October 1.

STEP TO EASE CRISIS HANGS IN BALANCE

Everybody is aware (this) transaction is a very important confidence-building measure that can defuse a crisis going on for a number of years, and open space for (further) negotiations on other outstanding disputes, ElBaradei said.

He was referring to longstanding U.N. Security Council and IAEA demands on Iran to curb enrichment and permit wider ranging inspections to verify it is not hiding more proliferation-prone nuclear activity. Last month, Iran revealed a second enrichment site under construction since 2006 but not declared to the IAEA.

The Vienna talks were the follow-through on understandings struck in Geneva to defuse a long standoff over fears Iran's rapid accumulation of LEU represents a latent quest to yield fissile bomb material, not fuel for electricity as it says.

There have been a lot of technical, legal and policy issues, issues of confidence and trust and that is why it has taken us some time (to get the draft accord), ElBaradei said.

I very much hope that people see the big picture -- that this agreement could pave the way for a complete normalization of relations between Iran and the international community.
He said France was part of the deal crafted after exhaustive consultations with the parties, despite Iranian statements saying Paris must be excluded and accusing it of reneging on past contracts to deliver nuclear materials.

Diplomats said a face-saving compromise had been drafted by ElBaradei. Under this, Iran would sign a contract with Russia which would then sub-contract further work to France.

Western diplomats say Tehran must ultimately curb the program to dispel fears of diversions into bombmaking.

But senior Iranian officials said this week Iran would not curtail enrichment as part of any LEU deal.

(Editing by Samia Nakhoul)

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