Russia and China have been a key impediment to efforts by the United States to rally members of the UN Security Council behind its plan to slap international sanctions on Tehran in order to force it to halt uranium enrichment.

The issue is expected to be front and center in negotiations between President George W. Bush and his Russian counterpart, Vladimir Putin, at a Group of Eight summit in St. Petersburg next weekend.

Although details of the proposed deal have not been released, it is seen as an attempt by the Bush administration to soften Russia's recalcitrance ahead of the Bush-Putin talks and bring Moscow firmly into the US camp.

"We are initiating negotiations on a peaceful nuclear cooperation agreement with Russia," White House spokesman Peter Watkins told AFP. "Such an agreement would benefit both the United States and Russia and indeed the world by enabling advances in greater use of nuclear energy."

He did not say when the talks would formally begin, but another official speaking on condition of anonymity said a formal announcement could be expected at the G8 summit.

The White House official, however, was adamant in linking the deal to Russia's approach to Iran and its readiness to cooperate with the Bush administration in halting what it sees as Iran's secret nuclear weapons program.

"We have made clear to Russia that for an agreement on peaceful nuclear cooperation with the United States to go forward, we will need Russia's active cooperation in blocking Iran's attempts to obtain nuclear weapons," Watkins said.

"Our policy on assistance to Iran's nuclear program has not changed," he added.

Under the proposed deal, Russia could become a key international repository of spent nuclear fuel, including from countries that use US-supplied nuclear reactors, a lucrative arrangement that may also pave the way for it becoming a leading supplier of nuclear technology and fuel around the world, US media reports said.

The US government had opposed such cooperation up to now in part because of Russia's assistance to Iran in building a nuclear power plant in Bushehr, a project opposed by the United States.

A change in procedures for handling nuclear waste coming from US-built reactors operating overseas will require congressional approval, and there were indications Saturday it may not come easy.

Democratic Representative Edward Markey, who co-chairs the Bipartisan Task Force on Nonproliferation, was quoted by The New York Times as saying turning Russia into a nuclear waste dump would create "one-stop shopping for nuclear terrorists and would-be proliferators."

Nevertheless, Watkins indicated the deal would be in line with Bush vision for expanded reliance on peaceful nuclear power around the world, provided all the safeguards required by the Nuclear Nonproliferation Treaty were strictly observed.

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