Iran says it has a compromise proposal that would allow the Islamic country the right to continue to enrich uranium that can be used both to generate electricity or build a nuclear weapon.
The Iranians did not give details of their own proposal, but President Mohammad Khatami made it clear that his government had no intention of stopping the practice of enrichment. "We expect that our legitimate rights be recognised and that Iran not be deprived of nuclear technology," Mr Khatami said in Tehran.
"The main problem is that they say, `You should ignore your rights', and that we would never do."
Britain, France and Germany have their own plan that they hope they will persuade the country to stop enrichment. They are due to present the plan today in a private meeting in Vienna.
The incentives being offered to Iran included the possibility of buying nuclear fuel from the West, along with the promise of lucrative trade, diplomats said. They did not confirm reports that a light-water nuclear research reactor was part of the package.
The three European powers are giving Iran a last chance to avoid the threat of United Nations sanctions. Although Iran insists its nuclear activities are peaceful and geared purely towards generating electric power, the United States has accused it of running a clandestine weapons program.
On November 25th, the Vienna-based International Atomic Energy Agency's 35-nation board of governors will deliver a fresh assessment of Iran 's co-operation - or lack of it - with the nuclear watchdog agency.
The United States is seeking to report Iran's non-compliance to the UN Security Council, which has the power to impose sanctions.
The foreign ministers of Britain and Germany this week urged Iran to indefinitely suspend its nuclear programme. Iran has resumed testing, assembling and making centrifuges used to enrich uranium, heightening US concerns that its sole purpose is to build a bomb.
But the European negotiators are holding out hope that a diplomatic confrontation - and the looming threat of punishing sanctions - can be avoided if Tehran agrees to give up enriching uranium in exchange for peaceful nuclear technology.
If Iran does not accept the incentives, suspend enrichment and agree to IAEA verification that it has done so, the three would probably back the US push to report Tehran's defiance to the Security Council.
PA