US allies exploring compromise with Iran

Key US allies have begun debating whether to tolerate Iran's only partially freezing its uranium enrichment program - a stance that could put them at odds with Washington, officials said Friday.

The officials - US and European diplomats and government employees - told The Associated Press that the deliberations, involving senior British, French and German decision-makers, were preliminary, and that no conclusions had been drawn.

Germany was supportive, France opposed and Britain noncommittal, they said.

"Nothing is on paper," a European diplomat said, describing the tentative plan as a "freeze for peace."

A US official said "there is some truth" to the reports of the discussions among the British, French and Germans, adding "we're still very skittish on that."

IAEA and Iran agree to draw up action plan

The officials spoke amid signs that Tehran was ready for concessions, with the head of the International Atomic Energy Agency saying Iran's chief negotiator had agreed to draw up a "plan of action" within two months on how to resolve questions about Iran's disputed nuclear program. 

International Atomic Energy Agency Director Mohamed ElBaradei described the two-hour meeting with Ali Larijani as" quite satisfying."

"I hope we should be in a position in the next weeks to move forward and break the stalemate where we have been in for the last few months," ElBaradei told reporters. He said they were drawing up "a plan of action which I hope we should be able to conclude within two months" and then start implementing.

Larijani also spoke of "good progress," but they reported no breakthrough in the core dispute - Iran's defiance of UN demands to stop uranium enrichment.

Larijani is due to meet EU foreign policy chief Javier Solana in Lisbon on Saturday, seen as the last chance to overcome a stand-off over Tehran's nuclear defiance before world powers start drafting tougher sanctions against it.

"I believe our talks with Mr. ElBaradei today will be quite helpful with the process that Mr. Solana is working on to reach an understanding and a solution," Larijani said after the meeting.

Britain proposes new sanctions 

Ratcheting up the pressure on the Islamic state, a British draft for a new UN Sanctions resolution proposed that Iran's airlines and ships could be denied landing and transit rights and two or more of its banks could have their assets frozen.

Britain also suggested banning new arms contracts with Iran, barring senior Iranian security officials from air travel and halting work by Russia on Iran's nuclear power reactor at Bushehr, according to the draft, obtained by Reuters.