VIENNA, Nov 12: European Union officials on Friday began evaluating Iran's response to an offer for Tehran to avoid possible UN sanctions over its nuclear program in a wrangle that has led the UN atomic watchdog to hold up a key report.

The International Atomic Energy Agency (IAEA) is standing by in order to give Iran more time to hand over a letter officials hope will announce a halt in uranium enrichment, a key process in the nuclear fuel cycle.

The letter could then be included in a report for an IAEA meeting in Vienna on Nov 25 that will consider US charges that Iran is secretly developing nuclear weapons. Britain, France and Germany are trying to strike a deal for Iran to suspend crucial nuclear fuel cycle activities so the IAEA will not send the dossier to the UN Security Council, which can impose punishing sanctions.

A Western diplomat said the EU may reject Tehran's response. The three were "debating internally whether to send Iran a point-by-point refutation of their reply, or to tell Iran that it must sign the (preliminary) agreement as is without 'side understandings'," a Western diplomat said, referring to a tentative accord worked out in Paris last week.

Iranian officials handed their reply late on Thursday on the proposed deal to the three countries and to Javier Solana, the European Union's foreign policy chief, the French foreign ministry said.

"We are in the process of analysing the elements of the response," ministry spokesman Herve Ladsous said in Paris, without going into details. The EU is seeking a suspension of all uranium enrichment-related activities until a long-term agreement is reached on Iran's nuclear program.

Iran wants the suspension limited to six months and for certain enrichment activities to still be allowed, diplomats said. According to diplomats here, the Iranians had a letter to the IAEA ready to go on Thursday in which Tehran was agreeing to suspend enrichment and asking the agency to verify the halt.

But the Iranians insisted that a second letter be sent to the Europeans to explain how they interpreted the Paris agreement. When the Europeans got this letter, they told the Iranians not to send the original letter to the IAEA, diplomats said.

They said there was a problem with the question of uranium conversion, the process of making the fuel for enrichment. One diplomat close to the talks said the Iranian response had "opened up new questions".

They needed answering, as the Europeans "really attach great importance to reaching a clear-cut agreement with Iran where there is no doubt whatsoever, particularly with regard to suspension", the diplomat said.

Another source said that while the Iranians were willing to suspend making the uranium hexafluoride (U6) gas that is the actual feedstock for enrichment, they wanted to continue making pre-products for the feedstock, namely U4 gas and yellow cake uranium ore.

Being able to include an agreement from Iran to suspend uranium enrichment in the IAEA report "is very important not only to the Iranians but also to the Europeans, and whether it's a day or two late is not that important", said the diplomat close to the agency. "If this gives the Iranians time to put an enrichment suspension into the report, then it's worth it." -AFP