Quoting government sources, the German news magazine says the concessions would include acknowledging Tehran's achievements in uranium enrichment, but in return Iran would have to allow international organisations to monitor its nuclear activity.

What was needed was "a realistic proposal that takes Iran's pride into account," Der Spiegel quotes a German government source as saying.

The Iranian government announced in April that it had enriched uranium to 3.5 percent using a cascade of 164 centrifuges at its Natanz installations.

Der Spiegel says such a proposal from Germany could threaten the united front presented by international negotiators who are trying to convince Tehran to give up on its uranium enrichment programme.

Last week France, Britain and Germany together drew up a series of proposals mixing incentives and sanctions threats to try to persuade the Iranian government to fall into line.

The five permanent members of the United Nations Security Council -- China, the United States, France, Britain and Russia -- plus Germany will discuss these proposals, which have yet to be put to Tehran officially, in London on Wednesday.

On Sunday Iranian foreign ministry spokesman Hamid Reza Assefi repeated that Tehran would "not retreat," and would not give up on enriching uranium.