"We have reached a final agreement with the three European powers," declared Iran's chief nuclear negotiatior Hussein Moussavian, following hectic weekend negotiations with Britain, France and Germany in Vienna.

The deal enables Iran to avoid UN sanctions over its nuclear program, which the US insists was aimed at producing weapons, not power.

Iran had till the last minute been insisting that 20 centrifuges be exempted from the suspension, while Washington was demanding that they be sealed by the International Atomic Energy Agency (IAEA).

The three EU nations rejected any exemptions, and said they would seek UN sanctions if Tehran did not agree by midnight Sunday.

Abandon hostile policy, Iran tells US

Under the new resolution, likely to be formalized later Monday, The IAEA will use cameras to monitor the centrifuges, which will not be sealed.  

Moussavian said the resolution will underline that Iran's decision to suspend uranium enrichment was a voluntary one, taken to convince the world about Tehran's peaceful nuclear programme.

The agreement came as a German Magazine, Der Spiegel, reported that Iran had built a secret tunnel near a uranium processing facility, although operations there had been stopped.

Quoting unnamed intelligence sources, the magazine said orders to build the tunnel were given by Ayatollah Ali Khamenei, Iran's supreme leader, last month.