"We would support the acquisition by Iran of a light water research reactor," said the document presented by Britain, France and Germany to major Western nations ahead of a meeting of the so-called Euro-3 with Iran on Thursday in Vienna.

The paper, presented to the G8 group of industrialized nations last week in Washington, outlines the EU3 position "in the run up" to a meeting November 25 of the UN nuclear watchdog the International Atomic Energy Agency that is expected to finally decide whether Iran is cooperating or not with the IAEA.

Thursday's meeting in Vienna is to give Iran a last-chance to come clean and to agree to suspend all activities related to uranium enrichment ahead of the November 25 IAEA meeting.

Uranium enrichment can be used to make fuel for civilian reactors but also the explosive core of atomic weapons.

Iran is also working on building a heavy water reactor, which can make plutonium ideal for nuclear weapons, while a light water reactor makes a safer form of plutonium, experts said.

A Western diplomat told AFP the EU3 had told the United States the document would be "used as the basis to make the offer to Iran" although it was not the final text.

The document said there was only "a short period of time (left) to secure a comprehensive and acceptable understanding from Iran," which the IAEA has been investigating since February 2003 on US allegations that Iran has a covert nuclear weapons program.

The United States does not "endorse" the EU3 approach but is watching the EU3 initiative to see how it turns out and then reconvene the G8 nations, which include Britain, Canada, France, Germany, Italy, Japan, Russia and the United States, the Western diplomat said.

"We intend to put to the Iranians an approach containing the immediate decisions we require from them on suspension and draft elements for a long-term agreement which we could start to negotiate as soon as the IAEA verifies that the suspension is in place," the EU3 paper said.

"The suspension will be indefinite, until we reach an acceptable long-term agreement," the three European nations said.

They said that if Iran failed to suspend uranium enrichment, the Euro 3 would join the United States in calling for the Islamic Republic to be taken to the UN Security Council, which could then impose punishing sanctions.

But if Iran plays ball, the EU3 would be ready to promise a whole range of measures, including access to nuclear fuel for its civilian reactors and recognizing Iran's right "to develop a nuclear power generation program to reduce its dependence on oil and gas.".

"To this end, we intend to give the Iranians a clear indication of the sort of longer term benefits Iran would gain in return for the suspension we seek. "Much of this has been offered before, but we will pull it together into a single package," the paper said.

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