Iran now stands ready to discuss its demand that the swap happen on its territory, ambassador Mohsen Shaterzadeh told a media conference in Brasilia.

While Tehran remained "firm" that any exchange of its uranium stocks for more highly enriched uranium from other countries be immediate, "a solution can be reached" on the condition that the swap happen on Iranian soil, he said.

The words appeared to signal a softening of Tehran's position in a standoff with Western powers over its controversial nuclear program.

They came as Iran multiplied contacts with UN Security Council members in an effort to split the body ahead of an expected vote on a resolution to impose further sanctions on Iran over the program.

Brazil, a temporary UN Security Council member, has backed Iran in the confrontation.

This week, though, Brasilia denied an Iranian report that it had made a concrete proposal for an alternative plan to break the impasse.

Brazil has said it is ready to host a nuclear fuel swap if asked by Tehran, but stressed no progress had been made on that idea.

Brazilian President Luiz Inacio Lula da Silva is to travel to Iran at the end of next week to see his Iranian counterpart Mahmoud Ahmadinejad.

Shaterzadeh said Tehran was "ready to move forward with this uranium swap operation, but the Western countries must show sincerity. If sincerity is seen, all this matter can be easily resolved."

The United States is leading the UN charge against Iran, accusing it of trying to build an atomic arsenal under the cover of its nuclear energy program.

It and allies Britain, France and Germany want Iran to give up its existing uranium stockpiles in exchange for uranium that is enriched to the level needed for civilian use -- but less than that required for military ends.

Initially, Iran agreed to that deal, which required the exchange to take place in another country, but then it backed away and demanded the swap happen on its soil.

earlier related report
Iran 'quite worried' about isolation, US official says
Washington (AFP) May 7, 2010 - The Obama administration said Friday that Iran missed another opportunity to break the deadlock with the world community over its nuclear program during a surprise, high-profile UN dinner Thursday.

The administration also claimed that Iran's dinner invitation to all 15 UN Security Council members on Thursday is another sign that Tehran is worried about its international isolation and that US diplomacy is paying off.

State Department spokesman Philip Crowley said the US and other delegates to the dinner hosted by Iranian Foreign Minister Manoucher Mottaki failed to bridge differences over a proposed nuclear fuel swap deal with Iran.

"It was a frank and professional exchange," Crowley told reporters.

"Members of the Security Council pressed the Iranian government to promptly meet its international obligations," he said.

"Several members of the council, including the US, pointed out the significant flaws and shortcomings in Iran's approach," he added.

"Mottaki focused on the Iranian counterproposal to the Tehran research reactor, which deviates in significant ways from the balanced IEAA proposal that Iran agreed to and then walked away from last October," he said.

He was referring to the confidence-building proposal from the UN International Atomic Energy Agency (IEAA), which would allow Iran to send most of its lower-grade uranium abroad to be further enriched for medical use.

"But we see this as yet another missed opportunity by Iran to meet its international obligations," he said.

The United States has been spearheading a drive for a fourth round of UN Security Council sanctions. It is trying to get Iran to stop enriching uranium, which can be used as fuel either for civilian power reactors or atomic weapons.

However, China is the main holdout to tougher sanctions, along with Brazil, Turkey and Lebanon on the Security Council.

Anne-Marie Slaughter, the director of policy planning at the State Department, told colleagues here that Iran is trying all the harder to engage the international community in a bid to stop its growing isolation.

"President (Mahmoud) Ahmadinejad coming to the UN, the dinner last night... I read these as signs that the government is quite worried," Slaughter told diplomats and Foreign Service staff in a speech broadcast to journalists.

The Iranians "are always trying to block, but ... they are even more actively engaging right now to try to stop anything that will make them more isolated. I read that as some sign of our success," Slaughter said.

Ahmadinejad was the only head of state to travel to the United Nations for the first two days of nuclear Non-Proliferation Treaty review conference.

In a surprise move, Iran invited all 15 UN Security Council members to dinner Thursday in New York, yielding one of the highest-level US-Iran contacts since the 1979 Islamic Revolution.

Washington and Tehran have had no diplomatic relations since April 1980, and face-to-face encounters between the countries' senior officials are rare.

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