Davutoglu had said earlier that he was planning to visit Tehran either later Tuesday or on his return from official trip to Kazakhstan which ends Friday.

But a diplomat, speaking on condition of anonymity, said the trip would take place next week, possibly on Tuesday.

Iran said on Tuesday that it had started the process of producing 20 percent enriched uranium, defying the threat of fresh sanctions.

The move coincides with Western efforts for Iran to commit to a proposal to ship its low-enriched uranium (LEU) in return for nuclear fuel for a Tehran reactor.

Although Iran has said it is ready "in principle" to sign on to the proposal, it insists that not all its LEU be shipped out in one go as world powers are demanding.

"The (Western) proposal is still valid...We believe there is still an important chance" for peace, Davutoglu told reporters in Ankara.

He added that he was planning to meet President Mahmoud Ahmadinejad and Foreign Minister Manouchehr Mottaki in Tehran.

Turkey, NATO's only member that neighbours Iran, insists the row over should be resolved through dialogue, arguing that economic sanctions or military action against Iran would have a damaging impact on the whole region.

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