"It would be a positive step in the right direction. Full compliance by Iran will now be essential," spokesman Scott McClellan told reporters as US President George W. Bush made an overnight stop here on an official visit.

Iran yielded earlier to international demands that it prove it is not developing nuclear weapons, promising Britain, France and Germany it would show "full transparency" to the UN's nuclear watchdog and allow an intrusive inspections regime.

The foreign ministers of the three countries immediately hailed the move as a major step forward in defusing mounting tensions and fears of yet another Middle East conflict.

"This is a very important day," France's Dominique de Villepin said after the ministers emerged from several hours of hard bargaining with top Iranian officials.

The unprecedented diplomatic effort bore fruit just 10 days before the expiry of an ultimatum set by the International Atomic Energy Agencyfor Iran to come clean.

In a joint declaration, Iran pledged to show "full transparency" to the IAEA, reiterated its commitment to the nuclear Non-Proliferation Treatyand vowed atomic weapons had "no place" in its defence doctrine.

It also said the "Iranian government has decided to sign the additional protocol" to the NPT, with the terms of the accord applied immediately while signature and ratification are pending.

This will allow the International Atomic Energy Agency to carry out surprise visits to suspect facilities -- a key tool if Iran can ever be given the nuclear all-clear by the Vienna-based body.

Iran also "decided voluntarily to suspend all uranium enrichment and reprocessing activities", bowing to another key IAEA demand.

"We very much welcome the efforts by the British, German and French foreign ministers to obtain a commitment of full compliance by Iran with the IAEA and nonproliferation obligations," said McClellan.

"If Iran does sign and implement the additional protocol, cooperate fully with the IAEA, and end its uranium enrichment reprocess activities, it would be a positive step in the right direction. Full compliance by Iran will now be essential," he told reporters.

"The proof of the value of today's agreement is not just on the words of the communique but above all on the implementation," the spokesman said.

Hassan Rowhani, the secretary of Iran's powerful Supreme Council of National Security, said officials here would fix a date to sign the protocol before the IAEA's board of governors next meets on November 20.

But speaking at north Tehran's leafy and former imperial Saadabad palace, where the talks were held, he cautioned that Iran reserved the right to resume enrichment at any moment if it were deemed necessary.

WAR.WIRE