On Thursday, Iran's envoy to the International Atomic Energy Agency (IAEA), Ali Akbar Salehi, gave a declaration he said "fully discloses" all aspects of Tehran's nuclear programme, which he insisted was entirely peaceful.
The IAEA governing board set a 31 October deadline for Iran to provide it with such a declaration. Failure to do so would have left the agency's board with no choice but to report Iran to the United Nations Security Council for possible economic sanctions.
But US officials insist Iran is in clear breach of the nuclear Non-Proliferation Treaty (NPT), and if the 35-nation IAEA board agreed, it would have to notify the Security Council.
US Secretary of State Colin Powell told the French daily Le Figaro that Iran's delivery of the declaration was positive, but added that he still did not trust them.
"They have tried to hide their weapons programme from the IAEA and the international community," he said.
Washington had hoped to push the IAEA board to declare Iran in "non-compliance" with its NPT obligations at a 20 November board session. But diplomats said it would be very difficult after Iran has said it will cooperate with the UN nuclear agency.
"Whatever happens now, the winds of engagement are now in favour," a western diplomat on the IAEA board said.
"Iran is responding and I think it calls for the US to at least rethink its isolationist policy for Iran"
President: Institute for Science and International Security
On Tuesday, the foreign ministers of Britain, France and Germany brokered a deal with Iran under which Tehran agreed to suspend its controversial uranium enrichment programme and accept a tougher, short-notice IAEA inspection regime.
The diplomat said this deal included an understanding that France, Germany and Britain would not support a finding of NPT non-compliance in November - provided IAEA chief Muhammad ElBaradei has no shocking revelations in his next Iran report.
Former UN weapons inspection David Albright said the success of the Big Three's mission showed engaging Iran was the superior strategy.
"Iran is responding and I think it calls for the US to at least rethink its isolationist policy for Iran...which is based on calling them names and isolating them," said Albright, who is president of the Institute for Science and International Security, a US-based think-tank.
The IAEA found traces of weapons-grade highly-enriched uranium at two sites in Iran, sparking fears that Iran has the technology and know-how to purify uranium for use in a bomb.
Iran claims these traces are the result of contamination from enrichment centrifuges bought abroad on the black market during the 1980s.