Iranian Foreign Minister Manouchehr Mottaki said on Saturday he had a 'very good meeting' with the head of the UN's nuclear watchdog on a plan to swap Iran's low-enriched uranium for higher-grade nuclear fuel.

But he repeated Iran's insistence on determining the amount of fuel to be exchanged and said it might be less than the 1,200 kg of low-enriched uranium (LEU) which world powers have asked it to part with in one go.

In exchange, Iran would receive uranium of a higher grade which it could use to fuel a Tehran research reactor producing medical isotopes.

'It is very common that in business, the buyer talks and offers about the quantity, and the seller only offers the price,' Mottaki told reporters at the Munich Security Conference.

In the proposed swap, he said, 'we determine the quantity on the basis of our needs and we would inform the parties about our requirements. Maybe it is less than this quantity you have already mentioned (1,200 kg) or (that is) a little more than the quantity we may need for our reactor.'

From the point of view of the United States and others, the proposed swap would reduce the risk of Iran enriching its low-grade uranium to the degree required for potential use in a nuclear weapon - an intention Tehran denies.

Mottaki said he had a 'very good meeting' of about 30 minutes in Munich on Saturday with Yukiya Amano, head of the International Atomic Energy Agency, the UN nuclear watchdog.

'We discussed and exchanged views on a wide range of issues - views about the proposal that is on the table,' Mottaki said. 'I tried to explain the views of the Islamic Republic of Iran for the director-general,' Mottaki said.

He was elaborating on comments he made on Friday, suggesting an agreement was close. The US and Germany on Saturday voiced scepticism about Iran's intentions and said those remarks had not gone far enough.

Mottaki rejected a questioner's suggestion that Iran's leadership was divided over the proposed uranium deal. 'In Iran there is only one voice about the issue. And that is, the exchange of fuel has been accepted and recognised. As I told you before, there have been certain doubts about it, and efforts were made to remove these doubts,' he said.

Mottaki did not address the timing of a proposed swap, a problematic issue in negotiations. On Friday he spoke of a 'simultaneous' swap, whereas the six-power group wants Iran first to ship its LEU abroad and then receive it back when sufficiently enriched to use in Tehran reactor.

The IAEA's last report in November said Iran had registered a total of 1,763 kg of LEU, a quantity experts say would be more than enough for one nuclear bomb if it were enriched to the level of 90 per cent.-Reuters