They have been working on a draft EU proposal, a copy of which was seen by AFP on May 19, offering Iran benefits in exchange for guarantees it will not make nuclear weapons, but threatening sanctions if Tehran does not comply.

Herewith are key extracts from that draft:

"The international community will:

-- reaffim Iran's inalienable right to nuclear energy for peaceful purposes in line with Article IV of the NPT (nuclear Non-Proliferation Treaty) ...

-- actively support ... Iran's civil nuclear plan, including the building of new light water reactors in Iran through joint projects ...

-- agree to suspend discussion of Iran's file at the Security Council on resumption of negotiations.

"Iran will:

-- commit to address the outstanding issues and all other international concerns through full cooperation with the IAEA (the UN watchdog International Atomic Energy Agency)

-- suspend all enrichment-related and reprocessing activities and to continue this during these negotiations

-- resume implementation of the Additional Protocol (for wider IAEA inspections)."

Under a section on negotiations toward a long-term agreement, the proposal talks about giving Iran legally binding, fuel assurances, based notably on:

-- "participation as a partner in an international fuel cycle centre in Russia, which would enrich all UF6 (uranium feedstock gas produced in Iran) ...

-- establishment of a facility/fuel bank/buffer stock to hold a reserve of up to five years supply of nuclear fuel dedicated to Iran, with participation and under supervision of the IAEA ...

-- confirmation by the IAEA that all outstanding issues and other international concerns have been resolved and that it is in a position to conclude that there are no undeclared nuclear activities or materials in Iran or diversion of nuclear materials."

The proposal also refers to:

- "Support for an inter-governmental regional forum ... with the aim of establishing regional security arrangements and a co-operative relationship on important regional security issues, including guarantees for territorial integrity and political sovereignty.

- Support (for) the objective of establishing a zone free of weapons of mass destruction and their means of delivery in Middle East

- Support for full integration into international structures, including the WTO (World Trade Organization), and to create the framework for increased direct investment in Iran and trade with Iran ...

- Civil aviation cooperation ... and removal of restrictions on civil aircraft manufacturers from exporting such aircraft to Iran ...

- Establishment of a long-term strategic energy partnership between Iran and the EU ...

Then the proposal outlines "possible measures in the event that Iran does not cooperate," listing a series of choices:

1) Measures Targeted Against Iran's Nuclear and Missiles Programmes:

- Embargo on export of goods and technologies relevant to these programmes

- Freeze of assets and ban on financial transactions of organizations and/or individuals involved in these programmes

- Travel/visa ban on individuals related to these programmes

- Suspension of technical cooperation with the IAEA

- Ban on investment against entitities associated with these industries

- Ban on Iranians from studying abroad disciplines related to nuclear and missile development

2) Political and Economic Measures:

- Reduction/freeze of bilateral contacts

- Visa/travel ban on selected high-ranking officials and personalities

- Freeze of assets of individuals and organizations connected to or close to the regime

- Arms embargo against Iran

- Embargo on exports of specific products (e.g. refined oil/gas products) to Iran

- End support for Iran's WTO membership application

- Prohibition on co-operation/investment in Iran in certain sectors

- General freeze of assets of Iranian financial institutions

- Reduction in government support for trade and export credit insurance to Iran."

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