Iran said on Wednesday it would not send its enriched uranium abroad for further processing but would consider swapping it for nuclear fuel and keeping it under supervision inside the country, the ISNA news agency said.

The decision is expected to anger the United States and its allies that had called on Iran to accept a deal which aimed to delay Iran's potential ability of making bombs by at least a year by divesting Iran of most of its enriched uranium.

A draft deal brokered by the UN nuclear watchdog, the International Atomic Energy Agency, calls on Iran to send some 75 percent of its low-enriched uranium to Russia and France to be turned into fuel for a Tehran medical research reactor.

"Surely we will not send our 3.5 percent fuel abroad but can review swapping it simultaneously with nuclear fuel inside Iran," Foreign Minister Manouchehr Mottaki told the ISNA students' news agency.

The United States has rejected Iranian calls for amendments and further talks on the deal and US President Barack Obama said time was running out for diplomacy to resolve a dispute over Iran's nuclear programme.

Mottaki criticised the United States for pressuring Iran to accept the deal.

"Diplomacy is not black or white. Pressuring Iran to accept what they want is a non-diplomatic approach," Mottaki said.

Russia and France, both also involved in talks with Tehran over what the West fears are its plans for an atomic bomb, also put pressure on Iran, which faces possible harsher international sanctions and risks even Israeli military action.

Iran says it needs nuclear technology to generate power.
   

Tehran has repeatedly said it preferred to buy reactor fuel from foreign suppliers rather than part with its low enriched uranium (LEU), that can be used for bombs if enriched further.

Iranian pledges in Geneva talks with the six powers on October
1 won Tehran a reprieve from sanctions targeting its oil sector, but Western powers stressed they would not wait indefinitely for it to follow through.

Iran had indicated that it may agree to send only "part" of its stockpile in several shipments. Should the talks fail to help Iran obtain the fuel from abroad, Iran has threatened to enrich uranium itself domestically.

If 70 percent of Iran's uranium is exported in one shipment, or at the most two shipments in quick succession, Tehran would need about a year to produce enough uranium to again have the stockpile it needs for a weapon.

The International Atomic Energy Agency (IAEA) has been trying to find possible compromises to rescue the deal, including Iran parking its LEU in a third country, pending delivery of reactor fuel.         

Turkey says it would be willing to store Iran's enriched uranium. Mottaki did not say what would happen to the low-enriched fuel it was prepared to swap, but authorities have said in the past that it could be stockpiled in Iran under IAEA supervision.

"Our experts will tell us how much fuel was needed to be swapped. We do not accept their experts' views," Mottaki said.

Iran has an underground enrichment plant at Natanz and IAEA inspectors visited a second, hidden enrichment site near Qom that Iran revealed in September. - Reuters