The head of the International Atomic Energy Agency, Yukiya Amano, said that Manouchehr Mottaki had made "no new proposals" to him in the talks, held on the sidelines of a major security conference in Munich, Germany.

"Our meeting covered a variety of areas. That included of course in Iran and the Tehran research reactor. We had a very interesting discussion ... There was not a new proposal. We exchanged views," Amano told reporters.

Mottaki was tight-lipped on what exactly was discussed, but insisted that Iran was serious about striking a deal and that he believed an agreement was possible "in the near future."

"We discussed and exchanged views about a wide range of issues ... We also exchanged views about the proposal that is on the table. I tried to explain the views of the Islamic republic of Iran for the director general," he said.

Mottaki said that such a deal, which would be seen as an important breakthrough in Iran's standoff with the West, "would be a way out of the present conditions."

Iran appeared to reject last October a deal proposed by the IAEA for Iran to export low-enriched uranium (LEU) to France and Russia to be further purified into fuel for a research reactor in Tehran.

Iranian President Mahmoud Ahmadinejad suddenly made an apparent about-turn on Tuesday, however, saying on national television that he would have "no problem" sending some LEU abroad.

EU and US officials, wearied by years of fruitless talks to persuade Iran to suspend uranium enrichment and ease concerns about its atomic ambitions, suspect the move is brinkmanship to avert a fourth round of sanctions.

US Secretary of Defence Robert Gates said in Ankara that talks on "some kind of other deal on the research reactor" than that proposed by the IAEA would have to take place within the formal setting of the Vienna-based agency.

"My view is, that's a discussion that the Iranians would better hold with the IAEA than at the Munich conference or in press conferences by president Ahmadenijad if they are prepared to take up the original proposal," he said.

The EU's foreign affairs chief Catherine Ashton agreed that Tehran had to talk to the IAEA.

"Iran must now respond to the director general of the IAEA," she said in Munich. "The Tehran research reactor proposals are an attempt to build badly needed confidence."

Russian Foreign Minister Sergei Lavrov, whose country, along with fellow UN Security Council member China, is seen as less keen on more sanctions, also urged Iran to work through the UN watchdog.

"What we want from Iran is to verify very specific questions, raised time and again by the IAEA a long time ago, it is not a difficult thing to do," he said in Munich.

Russian Deputy Prime Minister Sergei Ivanov said any fresh sanctions must target Tehran's ability to develop nuclear weapons "and not be expanded to cultural, humanitarian, economic parts of Iranian activity."

Russia is building Iran's first nuclear power plant in the city of Bushehr.

Chinese Foreign Minister Yang Jiechi said in Friday in Munich that Beijing was sticking to its position that a "mutually acceptable" solution to the spat could "somehow" be found.

"This issue has entered a crucial stage. The parties concerned should, with their overall long-term interests in mind, step up diplomatic efforts, stay patient and adopt a more flexible, pragmatic and proactive policy," he said.

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