BERLIN, June 28: Iran should be allowed to enrich uranium for power generation provided there is close monitoring by UN inspectors to ensure that it is not trying to develop atomic weapons, Germany’s defence minister said.

The minister’s comments could suggest that after years of failed negotiations with Iran, Germany and some western powers are willing to compromise over enrichment in order to resolve peacefully the nuclear standoff with Tehran.

But it suggests there is a split among western powers, with Washington and London on one side, and Paris and Berlin on the other, diplomats say.

A US spokesman shrugged aside talk of a rift, saying . Germany had assured the United States there was no divide between its position and that of the major powers on the issue of Iran not enriching uranium.

Deputy spokesman Adam Ereli, referring to the German defence minister’s interview, said ‘there’s no division’.

He added that when asked to clarify their position, the Germans told Washington ‘this is an erroneous story’.

In the interview, Defence Minister Franz Josef Jung was asked if Iran should be allowed to enrich uranium under scrutiny by the International Atomic Energy Agency.

“I think so. The offer includes everything. That means the civilian use of nuclear energy is possible but not atomic weapons. And monitoring mechanisms must be applied. I think it would be wise for Iran to accept this offer,” he said.

Mr Jung was referring to a June 6 offer of incentives made to Iran by Germany and the five permanent UN Security Council members — the United States, Britain, France, China and Russia.

He said close IAEA oversight of any Iranian enrichment activities would provide the necessary assurances to the international community.

“IAEA inspections can provide those assurances through monitoring. That is not a problem,” he said.

Western countries worry that Iran is trying to develop nuclear weapons under cover of an atomic power programme. Iran says it only wants peaceful nuclear energy.

The package of incentives is conditioned on Iran forgoing large-scale uranium enrichment for the time being and answering outstanding questions about its programme.

In order to begin negotiations on the offer, the sextet has demanded that Iran temporarily halt all uranium enrichment — including small-scale work — but Iran has so far refused.

Tehran has yet to respond to the offer and the United States and Germany have called for an answer before the G8 summit next month.

BERLIN AT ODDS: Several EU diplomats have said that Germany would be willing to let Iran continue enriching uranium on a small scale if it responds positively to the incentives offer.