Q+A: What happens next in Iran's standoff with West?

(Reuters) - Iran on Friday sidestepped a U.N.-drafted plan for it to send abroad uranium stocks that the West fears it could use for atom bombs, saying it preferred to buy fuel from foreign suppliers for a reactor that makes medical isotopes.

The other parties -- the United States, Russia and France -- have already approved the deal drafted by the U.N. nuclear watchdog, the International Atomic Energy Authority (IAEA).

Iran faced a Friday deadline to endorse the agreement. Its response appeared designed to buy time to avert any tightening of international sanctions over its nuclear work.

Buying nuclear fuel from abroad would fail to reduce Iran's stockpile of enriched uranium that worries big powers and would also require waiving U.N. sanctions that bar such purchases.

WHAT LED TO IRAN'S LATEST POSITION?

* Iran held talks with six world powers in Geneva on October 1 and struck two initial understandings that deflated immediate Western pressure for harsher international sanctions.

One was the tentative deal to ship low-enriched uranium abroad for processing and return for use in the medical nuclear facility in Tehran. The other was permission for U.N. inspections at a nascent uranium enrichment site that Iran revealed last month after three years of secrecy.

WHAT IS THE IAEA'S NEXT STEP?

* Four senior IAEA inspectors head on Sunday for the site, whose exposure intensified Western suspicions of covert Iranian activity oriented to developing nuclear weapons.

Iran says the facility, buried in a mountain on a military compound near the holy Shi'ite city of Qom, will produce only low-enriched fuel for electricity.

The inspectors aim to compare engineering designs to be provided by Iran against the actual facility, interview employees and take environmental samples to verify that the site has no illicit military dimension.

Western powers suspect Iran would have configured the plant to enrich uranium to weapons-grade if their spy agencies had not discovered it. Diplomats close to the IAEA say Sunday's visit will launch regular U.N. surveillance of the plant, similar to that at the larger Natanz enrichment complex, also concealed until Iranian opposition exiles blew the whistle in 2002.

Iran has not confirmed that access will be regular.

WHAT NEXT ON THE DIPLOMATIC FRONT?

* The six powers -- Britain, China, France, Germany, Russia and the United States -- had tentatively planned to hold a follow-up session to the October 1 talks at the end of this month.

But they have not set a date or venue, apparently waiting to see whether Iran responds clearly to IAEA chief Mohamed ElBaradei's draft deal on fuel supply, and whether it lets the IAEA inspect and monitor the Qom enrichment site unhindered.

Diplomats said both promised moves would be initial litmus tests of Iran's preparedness for nuclear restraint and transparency to defuse tensions over the longer term.

WHAT STEPS MIGHT FOLLOW?

* The United States and its European allies will push for the next round of high-level talks to focus on more significant steps such as an interim Iranian freeze on expanding enrichment, followed by a full suspension in exchange for major trade, technology and diplomatic benefits on offer since 2006.

Iran has ruled out any enrichment curbs as an infringement of its "legal and obvious" right to civilian nuclear energy. Western powers argue it has undermined those rights by hiding sensitive activity from the IAEA.

WHAT ABOUT MORE SANCTIONS?

* If there is no meaningful breakthrough by the end of the year, the Western powers have indicated they will seek sanctions going beyond Iran's nuclear and missile programs to target its vital oil sector. But Russia and China, which both have veto power at the Security Council, oppose energy sanctions, saying they would be counter-productive and drive Iran into a corner.

(Writing by Mark Heinrich in Vienna and Alistair Lyon in Beirut; editing by Philippa Fletcher)