Wednesday, June 7 2006 19:01 Hrs (IST) - World Time -

Washington: The US and Europe have presented a 'carrots and sticks' package to Iran offering it the possibility of enriching uranium in its own territory if Tehran adheres to certain stringent norms.

The proposal made to Iran yesterday 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, sources reported.

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 andother '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 poltical 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 Statesand its allies offered Iran the most generous proposal yet to resolve the nuclear standoff of the past two years.