"We respect our commitments and in accordance with the agreement, we are beginning the suspension today," Iranian government spokesman Abdollah Ramazanzadeh told reporters.

In Vienna, the head of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei, said his agency should be able to verify the suspension by Thursday, when its 35-nation board of governors is due to decide on the next step in the stand-off.

"I think pretty much everything has come to a halt right now so we are just trying to make sure that everything has been stopped," he told reporters. "Hopefully by Thursday I should be able to report that we've verified the suspension."

The IAEA chief told the BBC the suspension was "a step in the right direction" by Tehran.

ElBaradei also said Monday that Iran has produced up to two tons of uranium hexafluoride gas (UF6), but this amount is not enough to make a bomb.

Iran agreed a week ago with Britain, France and Germany to suspend as of Monday all its uranium enrichment-related activities, including making uranium gas and building centrifuges, in order to avoid being taken to the UN Security Council for possible sanctions.

The United States accuses Tehran's ruling clerics of seeking to develop nuclear weapons, and the issue has become a major issue for US President George W. Bush -- who has already lumped Iran into an "axis of evil".

But in a draft resolution for Thursday's IAEA meeting Britain, France and Germany came up with a text that is much softer than the United States wants, diplomats said.

The resolution says ElBaradei should "monitor the implementation of" the suspension and "report immediately to the (agency's) Board should the agency encounter evidence that the suspension is not fully implemented," according to a copy of the draft obtained by AFP.

The European trio's draft text also noted "with concern that Iran has continued conversion activities, including the production of UF6, in spite of the request made by the Board in September" to immediately halt all uranium enrichment activities.

But it did not mention taking the matter to the UN Security Council for possible sanctions, as Washington wants.

A Western diplomat said negotiations on a resolution were just beginning and "we have a significant amount of time to reach an acceptable solution."

In Brussels, British Foreign Secretary Jack Straw said Iran could still end up in the Security Council if Tehran fails to comply.

"What we're looking forward to is a translation of that (suspension) agreement into a text which is then agreed by consensus by the IAEA board of governors," he said.

"I hope very much that a way will be found as a result of these negotiations for Iran to come fully into compliance with its obligations," he added.

But "if there is a failure by Iran to meet its obligations then Britain, and also Germany and France, reserve our collective right to refer the matter to the (UN) Security Council."

Iran had already frozen actual enrichment of uranium since October 2003, but had pressed on with work on other parts of the fuel cycle -- including converting raw uranium into the gas fed into centrifuges for enrichment and making the centrifuges themselves.

The Islamic republic insists it only wants to enrich uranium to low levels, so as to become self-sufficient in producing fuel for a series of atomic energy reactors it plans to build in the future.

But Western officials have suggested that once it has mastered the fuel cycle, Iran could divert its programme towards making highly enriched uranium -- the explosive core of a nuclear bomb.

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