Wednesday, August 23 2006 15:08 Hrs (IST) - World Time -

New York: While the UN and European Union have promised to study Iran's reply, the US says it would begin discussion of economic sanctions if Iran continued to defy a UN Security Council demand to suspend all its uranium conversion activities by Aug 31.

The European Union in Brussels confirmed Tuesday that it had received Iran's formal reply to the package of economic incentives offered by Western nations in return for halting uranium enrichment.

"The document is extensive and therefore requires a detailed and careful analysis," said Javier Solana, the EU foreign policy chief.

"Pending this analysis, I will be in contact with the different key interlocutors and will remain n open contact with (Iranian chief nuclear negotiator) Ali Larijani," Solana said in Brussels.

At UN headquarters in New York, US Ambassador John Bolton said Western nations had offered a 'very generous' package of incentives to Iran in return for an end of uranium enrichment.

He said economic sanctions would be inevitable if Tehran rejected the incentives.

"We are prepared, if it (Iran) does not meet the terms set by the permanent five foreign ministers, to proceed here in the Security Council, as ministers have agreed, with economic sanctions," Bolton said.

"If, on the other hand, the Iranians have chosen the path of cooperation, as we've said repeatedly, then a different relationship with the US and the rest of the world is now possible," he said.

Foreign ministers of the five UN Security Council permanent members, plus Germany, met months ago in London and Berlin to draw up a response to Iran if the package of incentives were to be rejected.

It was not known when the EU in Brussels would forward the Iranian reply to UN headquarters. A UN spokesman said earlier that the reply was expected, but without any precise timeline.

The reply was handed over to the ambassadors of Russia, China, France, Britain, Germany and Switzerland in Tehran. The Swiss accepted it on behalf of the US because the latter has no diplomatic ties with Tehran.

The 15-nation council in July gave Tehran until August 31 to suspend all uranium enrichment activities or face sanctions. The US and some Western governments have accused Iran of concealing its programmes of making nuclear weapons and uranium enrichment is part of it.