Iran struck a deal with Brazil and Turkey on Monday over a nuclear fuel swap designed to allay international concern over its atomic ambitions and avert fresh sanctions.

It was not immediately clear whether the terms of the deal, hammered out in talks between leaders of the three countries in Tehran, would fully satisfy major powers which have been discussing a new round of punitive UN measures against Tehran.   

Iran said it had agreed to swap 1,200 kg of its low-enriched uranium (LEU) for higher-enriched nuclear fuel from abroad, to be used in a medical research reactor.

The exchange would take place in Turkey, Foreign Ministry spokesman Ramin Mehmanparast said, adding Iran could send LEU to its neighbour within a month. It would be under the supervision there of the UN nuclear agency watchdog.   

Iran, which rejects Western accusations it is seeking to develop nuclear bombs, had earlier insisted such a swap must take place on its territory.

Turkish Foreign Minister Ahmet Davutoglu said there was no justification for more UN sanctions on Iran after Tehran agreed to the fuel exchange.

'The swap deal, signed by Iran today, shows that Tehran wants to open a constructive path ... There is no more ground for new sanctions and pressures,' he told reporters in Tehran after the agreement was signed by ministers.

Iranian President Mahmoud Ahmadinejad called on six world powers for fresh talks on Iran's nuclear programme. 'It is time for 5+1 countries to enter talks with Iran based on honesty, justice and mutual respect,' Ahmadinejad said, referring to the five permanent UN Security Council members and Germany.

There was no immediate comment from Washington, which has been leading a Western push to impose new sanctions on Tehran.

Turkey and Brazil, both non-permanent Council members, had offered to mediate to find a resolution to the impasse. It was seen as the last chance to avoid a new round of UN sanctions.   

Brazilian President Luiz Inacio Lula da Silva and Turkish Prime Minister Tayyip Erdogan discussed the deal with Ahmadinejad in Tehran, Iranian state media reported.

Major world powers had urged Iran to accept a months-old International Atomic Energy Agency plan to ship 1,200 kg (2,600 lb) of its low-enriched uranium -- enough for a single bomb if purified to a high enough level -- abroad for transformation into fuel for a medical research reactor.

The proposal, backed by the United States, Russia and France, was aimed at giving time for diplomatic talks with Iran. Tehran agreed in principle to the deal in October but then demanded changes such as a simultaneous swap on Iranian soil, conditions other parties in the deal said were unacceptable.

Mehmanparast said Iran would formally notify the IAEA about Monday's swap deal within a week.

Iranian Foreign Minister Manouchehr Mottaki said Turkey would be obliged to return Iran's LEU 'immediately and unconditionally' if Monday's agreement was not implemented.

The head of Iran's Atomic Energy Organisation, Ali Akbar Salehi, said the United States and its allies had no more excuse to pressure Iran.

'We think we are on the way of resolution of this fabricated file which has been politicised since the beginning ... this file hopefully will be closed forever,' he said, state Press TV reported.

Trita Parsi, director of Washington-based National Iranian American Council, said a potential breakthrough had been made in the long-running dispute, saying Turkey and Brazil had succeeded in filling a 'trust gap'.  'But will the deal be satisfactory to the US? With the details remaining unknown, it's impossible to speculate,' Parsi said in an e-mail comment. - Reuters