A senior US diplomat said the offer was made in order to "kick start" the creation of a multilateral fuel bank so that countries could have access to nuclear fuel without having the capability to make it themselves.

This so-called "break-out" capability is a proliferation risk since highly enriched uranium (HEU) can be either fuel for reactors or bomb material. Low-enriched uranium (LEU), which is also reactor fuel, is not a direct bomb risk.

Both US President George W. Bush and International Atomic Energy Agency (IAEA) chief Mohamed ElBaradei have made proposals to create an international fuel service but details have never been made clear.

One problem is that there are abundant supplies of enriched uranium on the world market, experts have said.

Bodman said, in a speech read to an IAEA conference in Vienna: "We are working with major suppliers and the IAEA on a back-up supply mechanism, for states that forego investment in these capabilities."

"With that in mind, we are pleased to announce that the US Department of Energy will reserve up to 17 metric tons of highly enriched uranium for htis effort," Bodman said.

A Western diplomat close to the IAEA said ElBaradei wants the conference of 139 IAEA nations meeting in Vienna this week to "adopt a resolution that reinforces his mandate to get a focused group to make such a bank."

But it was not clear how this would "mesh" with the US proposal, the diplomat said.

The diplomat said US state department non-proliferation point man Robert Joseph had met in Paris earlier this month with "three IAEA experts." The diplomat did not provide details.

ElBaradei's priority is that the fuel in the bank would be guaranteed to participating nations since "without ironclad guarantees nations would not make such a deal," the diplomat said.

The senior US diplomat said Bodman was trying to deliver the message "that the United States strongly supports the peaceful use of nuclear energy."

The diplomat said the exact amount of HEU the United States is ready to "blend down" is 17.4 metric tons, which is enough for hundreds of atom bombs and would make enough low enriched uranium (LEU) to power 10 nuclear power reactors.

The HEU is an amount "currently in the US investory but declared in excess of national security needs."

The blended-down LEU will be "available about 2009."

IAEA officials said they had been alerted to the US offer but had not yet studied it.

The United States and the European Union are leading an international effort to stop Iran from getting the capacity to enrich uranium.

But US officials have been careful to point out that they are not against nations having nuclear energy, even if they want to eliminated proliferation risks.

"Our administration firmly believes that all responsible nations should have access to peaceful uses of the atom," Bodman said.

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