But while conceding the key US demand for a deadline, the draft resolution to be formally submitted to the United Nations' International Atomic Energy Agency (IAEA) does not require Tehran to be automatically reported to the UN Security Council if it fails to meet the time limit.

The draft says the board of the IAEA will "probably" consider whether further steps are needed after receiving the agency chief Muhammad al-Baradai's next report in November.

The IAEA has been investigating Tehran's nuclear programme since Iranian exiles reported in 2002 that it was hiding a uranium enrichment plant and a heavy water facility.

Washington accuses Iran of developing nuclear weapons under cover of an atomic energy programme, a charge Iran vehemently denies.

Trigger mechanism

The US had originally hoped that the IAEA board would report Iran next week to the UN Security Council, which has the power to impose sanctions for violations of the nuclear Non-Proliferation Treaty (NPT).

US officials had been pushing the European Union's big three states to get tough by giving up their strategy of trying to persuade Iran to abandon uranium enrichment and plutonium reprocessing.

Washington wanted the Europeans to include a "trigger mechanism" in the text that would automatically require the IAEA board to report Iran to the Security Council in November.

But a Western diplomat who follows the IAEA said the draft stopped short of this by saying the board would probably consider further steps and made no mention of the Security Council at all.