Enriching uranium for the U-235 isotope is the key process in producing fuel for civilian nuclear reactors.

But it is also the key process in making atom bombs, and nations that master this technology are considered to have a "break-out capacity" for manufacturing nuclear weapons.

Germany plus France, the Netherlands, Russia, Britain and the United States had in June proposed "a concept for assurances for a reliable supply of enrichment services or enriched uranium," German economics and technology ministry state secretary Joachim Wuermeling said.

The idea was to get countries "to refrain from developing indigenous sensitive fuel cycle capabilities," he told the week-long IAEA general conference.

Former US senator Sam Nunn told a special session at the conference that new answers to fighting the spread of nuclear weapons must be found urgently.

"Are we prepared to live in a world where dozens of countries have the capability and key ingredients to make nuclear weapons?" Nunn, a champion of non-proliferation during his 24 years in the US Senate, said.

"I want to make sure that every country that is a bona fide user of nuclear energy and that is fulfilling its non-proliferation obligations is getting fuel," at a time when concerns about nuclear proliferation are growing, IAEA chief Mohamed ElBaradei said.

ElBaradei stressed that nations would still be free to decide whether they wanted to do fuel work.

Germany is proposing a site run by the IAEA on what would be territory with international status, like at United Nations headquarters in New York, while Russia wants to set up an enrichment center in Siberia that would be on Russian territory but run by the IAEA.

Russian atomic energy chief Sergei Kirienko told reporters that the differences between the proposals were not important.

"What is important here is that dual-use technology should not be spread around the world," said Kirienko.

William Tobey, a non-proliferation official at the US Department of Energy, said that while it could be years before such sites were set up, there still was a lesson for the current Iranian crisis.

"The various proposals should make clear to the government of Iran that there are concrete alternatives that would allow for assured fuel supply for states that are in compliance with their non-proliferation obligations," he said.

"The proposals that were made to the government of Iran earlier this summer offered two alternatives and it should be clear that the positive alternative is real and that they should consider it carefully."

The United States charges that Iran is using what Tehran maintains is a peaceful nuclear program to hide the development of atomic weapons.

Washington wants Iran to stop enriching uranium and is seeking UN sanctions against Tehran if the Islamic Republic refuses to do this.

The five permanent UN Security Council members plus Germany are offering Iran talks on trade and other benefits if it suspends enrichment first.

Iran however is rejecting this path by pushing ahead with enrichment, saying it has a right to make nuclear fuel under the Non-Proliferation Treaty.

Nunn, a co-founder of the Washington-based Nuclear Threat Initiative think tank, said the group would contribute 50 million dollars (40 million euros) to help create a nuclear fuel bank, provided that one or more IAEA states put in an additional 100 million dollars in funding.

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