The United States is proposing "lifting sanctions partially, not only waiving sanctions but actually lifting them," in an agreement to be worked out in multilateral talks that would start once Iran suspended uranium enrichment, said a senior Western diplomat, who requested anonymity.

Washington, which considers Iran a sponsor of terrorism and now fears it is covertly developing nuclear weapons, has since the mid-1990's banned most US trade and investment with the Islamic Republic.

Lifting sanctions would allow sales to Iran of things like agricultural technology and commercial planes to replace the country's dilapidated fleet.

US officials have said they want to keep the details of the proposal secret in order to avoid the appearance of threatening Iran.

Iran's supreme leader Ayatollah Ali Khamenei said Sunday that his country, which claims its nuclear work is part of a peaceful program to generate electricity, would not buckle in the face of "threats and bribes".

The incentives offer from six world powers, which European Union foreign policy chief Javier Solana is to present in the coming days in Tehran, is accompanied by a threat of UN Security Council penalties if Iran fails to halt enrichment, which makes nuclear reactor fuel but also atom bomb material.

On the benefits side, which encompasses trade, security and technology benefits, the United States "is not only interested in allowing Europe to sell Airbus airplanes to Tehran but also supplying (US-made) Boeings," the diplomat said.

And trade in agricultural fields, "where the United States is particularly competitive ... is important for Iran since Iran is still a rural country in lots of ways," the diplomat added.

A second Vienna-based diplomat said sanctions would be lifted also to allow the sale of "dual-use technology which has peaceful but also military applications."

Iranian Foreign Minister Manouchehr Mottaki said Saturday that Solana was expected in Tehran to submit the proposal from the five permanent members of the UN Security Council -- Britain, China, France, Russia and the United States -- plus Germany for fresh multilateral talks.

The first diplomat said that during talks in Vienna Thursday on a draft of the package that had been drawn up by EU negotiators Britain, Germany and France, "the Americans added something to the offer. The Americans beefed up the offer of benefits, which was a surprise."

The draft proposal, which was seen by AFP before the final revisions, promises to "actively support ... Iran's civil nuclear plan, including the building of light water reactors in Iran through joint projects."

The draft text also proposes "legally binding ... assurances" including letting Tehran be "partner in an international fuel cycle centre in Russia" to enrich uranium.

It also said a nuclear fuel reserve would be set up to guarantee Iran supplies.

The first diplomat confirmed that this offer was still in the text as "they did not water down the offer in the nuclear fields."

In comments confirmed by other envoys, the diplomat said: "I don't think there were major amendments" to the draft, beyond the additions by the United States to make the benefits more attractive.

The diplomat said that a list of limited, targeted sanctions, such as a travel ban on Iranians involved in the nuclear program, and pegged as "possible measures in the event that Iran does not cooperate," was still in the proposal.

Iranian allies Russia and China "approved the sanctions paper, meaning they are not going to veto such a thing in the Security Council," where new resolutions would be required to levy such penalties, the diplomat said.

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