The proposal made to Iran by US, Britain, China, France, Germany and Russia was to encourage Tehran to stop developing its nuclear programme and offers a "fresh start" based on "mutual respect."
The four-page document said Iran could be allowed to resume uranium enrichment in the future if it can convince the United Nations Security Council that it is for peaceful purposes only, ABC reported.
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Designed to reward Iran, the document said that if Tehran addresses concerns over its nuclear programme, there is a possibility of international support for "regional security cooperation" involving states in the Gulf region and other "interested countries," it said.
World powers would be ready to support discussion among Iran and countries in the region "with the aim of establishing regional security arrangements and a cooperative relationship on important regional security issues, including guarantees for territorial integrity and political sovereignty," the document states.
After initially downplaying any interest in the proposal, Iran now says it needs more time to consider the proposal, a step President George W Bush says "sounds like a positive step to me."
Iran's change in tone comes after the United States and its allies offered Iran the most generous proposal yet to resolve the nuclear standoff of the past two years.
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Among the incentives, or "carrots" for Iran if it ceases its nuclear programme are - Tehran would get help building new nuclear power plants, specifically light water reactors that cannot be used to make weapons-grade nuclear fuel, ABC said.
Iran would also get a new facility to hold a five-year supply of nuclear fuel, and the deal would open the door to "guarantees for [Iran's] territorial integrity" -- words meant to assure Iran there would be no invasion by the United States or Israel.
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A package of economic incentives so Iran can purchase a new fleet of American and European aircraft, something that it is now forbidden to do. Its aging airline fleet has become a safety threat, it said.
The incentives would all be contingent on Iran agreeing to stop enriching uranium -- making fuel that can be used for bombs or nuclear power. Iran's refusal to do just that has raised tensions with Iran over the past two years.
If Iran rejects the deal, the draft proposal threatens a long list of sanctions -- "the stick" approach which includes freezing Iranian assets abroad, a travel ban on high ranking officials, an arms embargo,reducing diplomatic relations with all the countries that made the proposal.
This is very significant, since Russia and China two hesitant partners in the sticks approach, both of which have extensive trade with Iran -- have agreed to this proposal.
A source close to the Iranian government told ABC News today that Iran may agree to temporarily stop enriching uranium but is unlikely to agree to fully shut down the programme. It's unclear if that is enough for a deal on negotiations.
Meanwhile, American and European officials told the Washington Post that the confidential diplomatic package leaves open the possibility that Tehran will be able to enrich uranium on its own soil.
But the Bush administration and its European allies have withdrawn their demand that Iran abandon any hope of enriching uranium for nuclear power, according to several European and U.S. officials with knowledge of the offer.
The new position, which has not been acknowledged publicly by the White House, differs significantly from the Bush administration's stated determination to prevent Iran from mastering technology that could be used to develop nuclear weapons.
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"We are basically now saying that over the long haul, if they restore confidence, that this Iranian regime can have enrichment at home," said a US official who spoke on condition of anonymity. "But they have to answer every concern given all that points to a secret weapons programme."
The list of incentives that European Union foreign policy chief Javier Solana detailed to Iranian officials yesterday was endorsed by the five permanent members of the UN Security Council plus Germany.
It contains not only the revamped American promises on enrichment but a US offer to join negotiations directly if Iran suspends its program, as well as pledges of European assistance in building additional light-water nuclear power plants and support for Iranian membership in the World Trade Organization.
"We had constructive talks," Iran's chief nuclear negotiator, Ali Larijani, told reporters after the two-hour meeting in the palatial offices of Iran's Supreme National Security Council.
