The overture, mentioned in private by a senior Iranian diplomat who remained anonymous, followed a letter from Britain, France and Germany warning Iran that if it broke a November 2004 agreement to freeze nuclear fuel cycle activities it would face "consequences".

The Iranian diplomat, according to the daily, said his government had responded positively to a European offer for a four-way meeting to discuss the issue, which it wants to be held in Tehran in deference to Iranian officials who are preparing for the June 17 presidential elections.

The Washington Post said European officials had countered demanding guarantees that Iran is serious about its nuclear suspension before they send a delegation to Tehran for the four-way talks.

Despite the appearance of a thaw in the nuclear standoff with Iran, diplomats on both sides of the Atlantic told the daily they were uncertain there was enough common ground for a meeting to take place.

US and European diplomats said the only way out of the escalation would be a retreat by Iran from its plans to restart a uranium-conversion facility at Isfahan.

In their warning, the Europeans made it clear Iran could face international sanctions.

British Prime Minister Tony blair told reporters Thursday that "we certainly will support referral to the UN Security Council if Iran breaches its undertakings and obligations."

The United States, which had been pressing for a tougher stance from Europe in the nuclear standoff with Iran, said Thursday it backed Europe's approach and urged Tehran to adhere to its international obligations.

Behind the cameras, the US daily said, US officials were mapping scenarios for a possible emergency session of the International Atomic Energy Agency (IAEA) in Vienna next week, should Iran inform the UN agency that it will resume its nuclear program.

If Iran takes that step, US and European officials told the daily they would use the IAEA meeting to issue Iran an ultimatum to reverse course or find the matter in the hands of the UN Security Council.

Iran has voiced frustration with the pace of the negotiations, which remain deadlocked over Iran's ambition to master the full nuclear fuel cycle and European demands that Iran abandon such work altogether.

Tehran maintains that it needs nuclear power to meet increased energy demands from a booming population and to free up its vast oil and gas resources for export and thus earn badly-needed hard currency.

The standoff has worsened after the three EU interlocutors last month rejected an Iranian proposal to begin a phased resumption of enrichment. Iran complained the talks were being deliberately dragged out so as to keep the freeze in place.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.