European Union foreign policy chief Javier Solana will hand Iran a package of incentives today that aim to persuade Teheran to abandon its plan to make nuclear fuel, a spokeswoman for Solana said yesterday.

The spokeswoman, speaking in Brussels, said Solana would fly to Teheran later on Monday (local time) and present his proposals today.

He was due to meet Iran's chief nuclear negotiator Ali Larijani to hand over the package, an EU diplomat, who declined to be named, said in Teheran.

The incentives Solana will deliver to Iran stem from an initiative put together by the three biggest EU states Britain, France and Germany and approved by a forum that also included the United States, China and Russia.

Details of the package have not been announced, but diplomats have been working on themes ranging from offering nuclear reactor technology to giving security guarantees.

Western nations fear Iran is enriching uranium to make an atomic bomb, but Iran insists its aims are entirely peaceful and that it wants to make fuel only to generate electricity.

Iranian President Mahmoud Ahmadinejad said on Saturday Iran would consider incentives but insisted the crux of the package that Iran must give up uranium enrichment was still unacceptable.

The United States has said Iran was probably staking out a negotiating position with its tough talk and said it was not taking the negative comments as a definitive rejection.

Oil weapon

Diplomats in Washington said an arms embargo against Iran was among the possible sanctions if Iran did reject the offer.

But they said the six powers had pledged to keep details secret until the package was shown to Iran. This was so Iran did not feel compelled to reject any or all of the elements as a face-saving gesture if they were made public first, they said.

The United States has said it wants a diplomatic solution to the dispute but has refused to rule out military action.

Ayatollah Ali Khamenei, supreme leader of the world's fourth largest oil exporter, said on Sunday that if the United States made a "wrong move" towards Iran, energy flows in the region would be endangered.

Iranian officials have in the past ruled out using oil as a weapon in Iran's nuclear standoff with the West, but Khamenei's comments suggested Iran could disrupt supplies if pushed.

Oil prices climbed more than US$1 to above US$73 a barrel yesterday after his comments.

Solana arrived in Israel late on Sunday as part of a previously planned trip.

"He will travel to Teheran this evening and tomorrow morning he will present the proposals of the international community for opening negotiations on Iran's nuclear programme," the spokeswoman for Solana said.

Source: China Daily