Hammer, a spokesman for US president Barack Obama's National Security Council, said the West had made a "good faith and balanced offer" that would provide Iran with fuel for a research reactor.

"We believe it makes sense for all parties," he said.

Uranium for nuclear fuel

The proposal, backed by the IAEA, asks for Iran to ship out 70 per cent of its low-enriched uranium (LEU) to Russia and France, thereby reducing the stockpile of material that could be enriched to a higher level and possibly be used to make nuclear weapons.

The uranium would be returned to Tehran about a year later as refined fuel rods, which can power reactors but cannot be readily turned into weapons-grade material.

The deal allays Western fears about Iran's atomic ambitions, claims that the Islamic republic continues to vehemently deny.

Iran has been hesitant to move forward with the deal since it was first proposed in October by six countries - the US, Russia, China, Britain, France and Germany.

IN DEPTH

 

  Timeline: Iran's nuclear programme
  Video: Iran changes tack on uranium
  Inside Story: Sanctioning Iran
  Fears grow over Iran's nuclear sites

The deal was later refined that month in talks among Iran, the US, Russia and France, but was then stalled over disagreements about shipping and domestic resistance inside Iran.

Ahmadinejad's timeframe of four or five months for the uranium processing overseas appears a long way off from the one year that Western officials say it would take for the process – a failure to bridge that difference could allow Iran to accuse the West of foot-dragging.

The Iranian president also did not say whether he was ready to ship out most of the country's uranium stockpile in one batch - another condition of the proposal designed to delay Iran's ability to make a nuclear weapon.

Al Jazeera's Alireza Ronaghi reporting from Tehran said Iran's apparent change of heart had come about after an easing of conservative opposition to the proposal.

"President Ahmadinejad has said .... Iran has the technology at its disposal to produce uranium enriched to the level that could be used as fuel, and now that Iran possesses that technology there is no problem in sending the uranium outside," he said.

"The main problem was within Iran, where some conservatives were trying to lash out at the president because of his willingness to strike a deal with foreign powers, but after months of debate it seems like that obstacle has been removed."

Prisoner swap

Meanwhile, the US and its allies have been pushing for more UN sanctions to be slapped on Iran for not complying with UN resolutions over its nuclear programme, but Russia and China are not in favour of any new penalties.

Ahmadinejad also suggested on Tuesday that Iran would free three jailed US hikers in exchange for Iranians held in US prisons, adding that there are "some talks under way to have an exchange".

But the US state department said on Wednesday it was "not interested" in a prisoner swap with Iran but remained focused on ensuring the immediate release of three hikers and other Americans held there.

The three travellers were hiking in Iraq's northern Kurdistan region in July when they accidentally crossed the border into Iran, their families said.