The  deal was reached at a meeting on Thursday of foreign ministers from the United States, Britain, France, Russia and China - all permanent members of the UN Security Council - as well as Germany and Javier Solana, the EU foreign policy chief.

Officials at the meeting in Vienna said no details would be issued before the package was presented to Iran, which has said its programme to enrich uranium - a key ingredient in civilian nuclear power plants and atomic bombs - was non-negotiable.

US optimistic

George Bush, the US president, warned Iran that if it refused to stop enrichment, a process that can yield bomb-grade material, its case would go to the UN Security Council.

Iran says its nuclear programme
is solely for power generation

"If that is what they decide to do, the next step is for our coalition partners to go to the Security Council," Bush said.

In Washington, Tom Casey, the US state department spokesman, said Bush had spoken to Russian and Chinese leaders, who in the past have opposed sanctions, and that the conversations had been positive.

Casey said the United States was willing to "go the extra mile" while Iran was using every excuse it could find not to move forward with discussions.

"Iran clearly has a choice that it is going to have to make," he said.

The White House urged Iran to take several days to examine the US policy shift and said Washington would reserve judgment until then on Tehran's response.

Earlier, a senior US official said Tehran had only weeks to accept the overture before Western countries would start pursuing UN sanctions.

Military option

Defying UN Security Council calls for it to stop seeking enrichment technology, Tehran said in April it had produced its first batch of low-enriched uranium.
 
Before the Vienna meeting, diplomats said the incentives were expected to encompass a light-water nuclear reactor and an assured foreign supply of atomic fuel for Iran so Tehran would not need to enrich uranium itself.

Sanctions could entail visa bans and a freeze on assets of senior Iranian officials before resorting to trade measures, they said.

Condoleezza Rice, the US secretary of state, who announced the offer of talks on Wednesday, said a last-resort military option, should talks or sanctions prove futile, remained on the table.