The demand that all spent fuel be rapatriated has been a concession to the United States, which accuses Iran of trying to acquire nuclear weapons and has been lobbying Russia to halt its work on Iran's Bushehr power plant altogether.

But Russia has refused to drop the lucrative contract -- valued at 800 million dollars -- and in December 2002 announced that Iran was willing to guarantee that all used fuel would be returned.

Iran had initially rejected the demand, but without fuel the plant would have effectively served as a useless concrete hulk -- meaning Tehran had little choice but to bow to Moscow's condition.

Spent fuel from the plant could potentially be reprocessed to make plutonium for military uses -- meaning the plant would further add to fears over Iran's parallel uranium enrichment programme.

But Russia's Federal Atomic Energy Agency, Rosatom, has consistently argued that the risk of Bushehr's spent fuel eventually ending up in a bomb is minimal.

"In the process of the functioning of the VVER-1000 reactor, plutonium does effectively accumulate in the fuel but only in a relatively weak quantity -- less than one percent -- and therefore is practically useless for making a nuclear weapon," a Rosatom representative, Nikolai Shingarev, said recently.

"Furthermore, the extration of plutonium is a very complex operation that requires alot of time and enormous expenditure. Theoretically it is possible... but there are easier ways to build a bomb."

But Sunday's signing of the fuel deal came after what have been two years of complex negotiations and haggling over issues including a timetable for deliveries, methods of transport and who should pay the bill.

Some hardliners in Iran also believe that regardless of the accord, the country should hang on to its spent fuel.

But the true focus of international concerns is not Bushehr, but others sites across the country where Iran has been working on mastering the fuel cycle itself -- so as to become independent.

These sites are spread around cities in the centre and north: Natanz, Isfahan, Tehran, Arak, Karaj and Kashan.

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