U.S. may drop key condition for Iran nuclear talks: report

Iranian chief nuclear negotiator Saeed Jalili attends a news conference in Tehran February 22, 2008.

WASHINGTON (Reuters) - The Obama administration and its European allies are considering dropping a long-standing U.S. demand that Iran immediately shut down its nuclear facilities if it enters talks over its atomic program, The New York Times reported on Monday on its website.

The proposal would also allow Tehran to continue enriching uranium for some period during the talks and would be a sharp break from the Bush administration, which had demanded that Iran halt its enrichment activities, the report said.

Enriching uranium can produce fuel for a nuclear power plant or, if purified to a much higher degree, provide material for an atomic bomb. The West suspects Iran's nuclear program is cover for building an atomic bomb but Tehran says it is to generate electricity.

The proposals, still under discussion, were aimed at drawing Iran into nuclear talks that it has so far shunned, the newspaper said, citing officials involved in the strategy sessions.

A senior Obama administration official cautioned that "we are still at the brainstorming level" and said the terms of an opening proposal to Iran were still being debated, the newspaper said.

The six major powers dealing with Iran, including the United States, met in London last week and invited Tehran to a new round of talks about its nuclear program.

The New York Times cited European officials as saying that in talks during Obama's visit to Europe there was agreement that Iran would not accept the immediate shutdown of its facilities that the Bush administration had demanded.

Obama administration officials declined to discuss details of their deliberations, but said any new American policy would ultimately require Iran to cease enrichment, the newspaper said.

"Our goal remains exactly what it has been in the U.N. resolutions: suspension," one senior administration official told the newspaper.

(Reporting by JoAnne Allen)