Diplomats said the Islamic republic had effectively rejected the deal because it refused to accept some of the conditions called for by the West and insisted on a simultaneous exchange of fuel, which western countries have ruled out as unacceptable.

The proposal made by the International Atomic Energy Agency (IAEA) last October, "which was supported by France, Russia and the United States, continues to be on the table," said IAEA spokeswoman, Gill Tudor.

"The IAEA is not in a position to discuss the views of the parties involved, but it is aware that they are considering the best solution.

"The IAEA will continue to work in good faith as an impartial intermediary, and we hope that agreement among the parties will be reached as quickly as possible, which will contribute to the establishment of confidence."

Earlier, one western diplomat, speaking on condition on anonymity, told AFP that Iran had effectively given a formal response at a meeting between the IAEA's new new chief Yukiya Amano and Iranian ambassador Ali Asghar Soltanieh earlier this month.

The IAEA refused to say whether the meeting took place or discuss its possible content.

But, according to the diplomat, Soltanieh reiterated the Islamic republic's earlier position, including the demand for a simultaneous fuel swap, which the West has persistently ruled out as unacceptable.

The Iranians did not give their response in writing, however, the diplomat noted.

Instead, the IAEA drew up the minutes of the meeting and then asked Soltanieh to verify that the memo correctly reflected Iran's position.

"His response was 'yes'," the diplomat said.

Another diplomat also said it was unclear whether Iran had actually delivered a written response. But "certainly there was no agreement to the TRR (Tehran Research Reactor) proposal," the diplomat said.

Under the terms of a plan, hammered out under the IAEA's auspices last October, the Islamic Republic was to have shipped abroad most of its stockpile of enriched uranium for processing into fuel for a reactor that makes radio-isotopes for medical use.

The proposals, brokered by the IAEA's then chief Mohamed ElBaradei, were seen as a way of appeasing western fears that Iran was stockpiling uranium for a covert nuclear weapons programme, because it would have seen most of the Islamic Republic's uranium taken out of the country before any reactor fuel was dispatched in return.

But Tehran, which insists its atomic programme is entirely peaceful, declined for months to give any formal response to the offer, with Iranian officials taking seemingly contradictory positions on it.

World powers gave Iran until the end of 2009 to accept the deal but the deadline was ignored, prompting talk of fresh sanctions against the Islamic republic.

In Washington on Tuesday, US State Department spokesman Philip Crowley said: "I am not sure that they have delivered a formal response, but it is clearly an inadequate response."

On January 5, Iran repeated its counter-proposal for a staged fuel swap, but left the "details" open to discussion.

"If the other side expresses readiness for the gradual and staged swap, we will discuss the details," foreign ministry spokesman Ramin Mehmanparast said.

Iranian Foreign Minister Manouchehr Mottaki insisted that Tehran in fact had until the end of January to reach a uranium swap deal, stressing it will press on with plans to produce highly enriched nuclear fuel if there is no agreement.

Mottaki gave the West a one-month "ultimatum" to accept the Iranian counter-proposal.

Iran is already under three sets of UN Security Council sanctions over its defiance and refusal to suspend enrichment, which lies at the heart of international fears about its nuclear programme.

The process that makes nuclear fuel can also be used to make the fissile core of an atomic bomb.

The United States, Israel and other world powers suspect Tehran is making a nuclear bomb under the guise of a civilian programme, an allegation Iran vehemently denies.

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