Turkey, Brazil seal deal on Iran nuclear fuel swap

Turkish Foreign Minister Ahmet Davutoglu attends a joint news conference with his Iranian counterpart Manouchehr Mottaki in Tehran April 20, 2010.

TEHRAN (Reuters) - Turkey said on Sunday Iran had agreed on a nuclear fuel swap deal which could help end Tehran's stand-off with the West over its atomic programme.

Full details of the agreement were not immediately released by Turkish and Brazilian officials mediating in Iran's dispute with leading world powers, who suspect Tehran of covertly developing a nuclear bomb.

Turkey's foreign ministry said a formal announcement might be made on Monday after any final revisions by the Brazilian and Iranian presidents and the Turkish prime minister.

"Yes, it has been reached after almost 18 hours of negotiations," Turkish Foreign Minister Ahmet Davutoglu told reporters in Tehran when asked if there would be an agreement.

Earlier, Turkish Prime Minister Tayyip Erdogan flew to Tehran to join Brazilian President Luiz Inacio Lula da Silva who has been negotiating with Iranian officials in what Western and Russian authorities have said is probably the last chance to avoid new U.N. sanctions against Iran.

A U.N.-backed deal offered Iran last October to ship 1,200 kg (2,646 lb) of its low enriched uranium -- enough for a single bomb if purified to a high enough level -- to Russia and France to make into fuel for a Tehran research reactor.

Iran later said it would only swap its LEU for higher grade material and only on its own soil, conditions other parties in the deal said were unacceptable. It denies seeking to build an atomic bomb.

"I am going to Iran because a clause will be added to the proposal which says the swap will take place in Turkey," Erdogan had said earlier.

"We will have the opportunity to start the process regarding the swap," he said. "I guarantee that we will find the opportunity to overcome these problems, god willing."

Lula also told reporters after holding talks with Iranians that "the level of hope (to reach an agreement) has increased."

SANCTIONS LOOM

Lula has met President Mahmoud Ahmadinejad and Iran's most powerful authority Supreme Leader Ayatollah Ali Khamenei, who has the last say on all state matters like Iran's nuclear activities.

"America is angry over the proximity of independent countries like Iran and Brazil...That is why they made a fuss ahead of your (Lula) trip to Iran," state television quoted Khamenei as saying.

Secretary of State Hillary Clinton said on Friday that Lula's mediation effort would fail.

Iran has denied Western accusations it is developing nuclear weapons under cover of a civilian nuclear programme.

Turkey and Brazil, both non-permanent members of the U.N. Security Council, have offered to mediate to find a resolution to the impasse at a time when world powers are in talks to impose a fourth round of U.N. sanctions on Iran.

Iran had said it viewed the mediation positively.

The Islamic state started higher enrichment in February to create fuel for the research reactor itself, after the failure of talks with major powers over the nuclear swap. The step brings Iran's enrichment closer to levels needed for making weapons-grade material -- uranium refined to 90 percent purity.

(Additional reporting by Fernando Exman, Tulay Karadeniz and Pinar Aydinli; Writing by Parisa Hafezi, Editing by Jon Boyle)