In a major US concession, the resolution does not set an October 31 ultimatum for Iran to comply with demands from the UN nuclear watchdog, according to a copy of the text obtained by AFP.

"The United States ... and the EU 3 (Britain, France and Germany) have reached agreement on a draft resolution that will be considered" Friday by the IAEA board, State Department spokesman Edward Vasquez said Thursday.

Many members of the 35-nation International Atomic Energy Agency board, including non-aligned nations, had been hostile to the US's insistence on an ultimatum.

A US State Department official said President George W. Bush's top non-proliferation official, Undersecretary of State John Bolton had approved the text, but Secretary of State Colin Powell still had to give the go-ahead.

The United States, which charges that Iran is secretly developing nuclear weapons, would like to see the IAEA judge Iran in non-compliance with nuclear Non-Proliferation Treaty (NPT) safeguards and take Tehran before the UN Security Council for possible sanctions.

A Western diplomat close to the talks said that even though Washington acceded to demands from Britain, France and Germany to drop the ultimatum, "the language is still pretty tough. There are the equivalent of two strong deadlines in the text."

The draft says it is "imperative" for Iran to clear up "outstanding issues" with the IAEA "before the board's November 25 meeting," such as "the sources and reasons for enriched uranium contamination and the import, manufacture and use of centrifuges."

It also said it "is necessary that Iran immediately suspend all enrichment-related activities, including the manufacture or import of centrifuge components, the assembly and testing of centrifuges and the production of feed material" for enriching uranium.

Such a process uses centrifuges to produce what can be fuel for civilian reactors, but also the explosive core for atomic bombs.

The draft says the IAEA board of governors will decide in November "whether or not further steps are appropriate in relation to Iran's obligations under its NPT (nuclear Non-Proliferation Treaty) safeguards agreement and to the requests made of Iran by the board in this and previous resolutions."

Such steps could be to take Iran to the Security Council, although there is no automatic requirement for the board to do this, as the United States had demanded.

The Western diplomat said the United States "had wanted strong deadlines in the resolution and there are."

He said the United States had not insisted on its hardline demands since "it wanted to go forward (on the Iranian issue) with its friends."

But Iran's delegation chief in Vienna Hossein Mousavian said "I don't believe it's an important resolution."

He told AFP Iran, which insists its nuclear program is strictly peaceful, cared about the report of IAEA chief Mohamed ElBaradei to the agency board in November "and the final decision of the board."

Mousavian said the Americans had strived for an ultimatum "since they need this propaganda for the US presidential election."

The draft asks ElBaradei to present an overall report on Iran before the November meeting that would summarize the agency's findings on Iran in the last two years "as well as a full account of past and present Iranian cooperation with the agency."