The European Union, the lead nuclear negotiator with Iran, agreed to give Iran more time for talks, Peter Jenkins, British ambassador to the International Atomic Energy Agency (IAEA), told reporters.

Talks on a Russian proposal to allow Iran to conduct uranium enrichment -- but in Russia and not in Iran in order to keep Tehran from obtaining nuclear technology crucial to making atom bombs -- will now take center stage.

Iran has refused to give up enrichment on its territory but Iranian ambassador to the IAEA Mohammad Akhondzadeh praised the "positive trend" over the "last couple of weeks" and said Iran was "prepared to follow the path of negotiation with other countries."

The IAEA's 35-nation board of governors was meeting in Vienna to review progress since September 24, when it found Iran in non-compliance with the nuclear Non-Proliferation Treaty (NPT), a finding that requires eventual referral to the Security Council for possible international sanctions.

EU-Iran talks collapsed in August when Iran broke a suspension of uranium conversion, the first step towards making enriched uranium, which can be used to fuel nuclear reactors and as the explosive core of atom bombs.

Speaking for the EU presidency, Jenkins warned Iran against making any "unilateral moves" to increase its atomic activities.

He said Britain "reserves ... the right" to convene a special session of the IAEA ahead of the next scheduled meeting in March to consider referral.

German ambassador Herbert Honsowitz told the IAEA board that the concern over unilateral moves was "particularly true regarding threats to start enrichment. It must be absolutely clear that this would immediately put an end to our efforts."

US ambassador Gregory Schulte said: "The board cannot and should not have unlimited patience if we seek to re-establish confidence about Iran's program."

The United States backs the European Union call "to defer for a short period the required report to the Council."

But "Iran must understand that the report to the Council is required and will be made at a time of this board's choosing," Schulte said.

The EU and the United States charge that Iran is, despite its denials, using its drive towards atomic energy for electricity generation as a cover for developing nuclear weapons.

Jenkins said the EU had "acceded to the request of several board members who have asked for more time for diplomatic dialogue on the future of Iran's nuclear program."

Russia and China, which both have strong economic ties to Iran, oppose referral, as do non-aligned states, which insist on Iran's right, according to the NPT, to work on the nuclear fuel cycle.

But Jenkins warned Iran needed "to implement the confidence-building measures" for which the IAEA has called, namely to cease uranium conversion work.

Jenkins said "Iran should not conclude that this window of opportunity will remain open in all circumstances."

He also said, in comments echoed by other Western ambassadors, that the EU "sees grounds for deep concern" that Iran "has admitted to having in its possession a document which was supplied" by an international black market and which is a guide to making the explosive core of an atom bomb.

Akhondzadeh said this was "simple and non-sophisticated information which could be found in open literatures and on Internet" and that Iran's turning it over to the IAEA "is a clear indication of Iran's full transparency."

After the IAEA board, "the action is elsewhere," a diplomat said, referring to plans by Russia and the EU negotiators -- Britain, France and Germany -- to meet with Iran on December 6, probably in Vienna or Moscow, to break the deadlock.

Akhondzadeh told AFP his country was "optimistic" a December meeting would be held but said: "We have not received an invitation yet."

US Undersecretary of State Nicholas Burns said in Washington on Tuesday that the United States had made progress in mustering support from countries such as China and Russia to insist on a crackdown on Iran, even with a compromise solution.

China called at the board meeting for Iran to cooperate with the IAEA and to cease conversion in order "to create favorable conditions for the resumption of negotiations," a diplomat told AFP.

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