DAVOS, Switzerland (Reuters) -- The UN nuclear agency chief said today that dialogue is continuing on a draft deal on enriched uranium between Iran and world powers despite Tehran's rejection of terms meant to prevent the material being used for atomic bombs.
"The proposal is on the table. Dialogue is continuing," said Yukiya Amano, head of the International Atomic Energy Agency, in his first public remarks on the standoff since he succeeded Muhammad El-Baradei two months ago.
Amano, who was attending the World Economic Forum, did not elaborate to reporters.
Western diplomats have said Iran has effectively rejected the IAEA-brokered proposal and they are pursuing broader UN sanctions against the Islamic republic.
Diplomats familiar with IAEA contacts with Iran told Reuters last week Tehran had notified the UN agency that it could not accept central aspects of the draft deal. This followed months of dismissive or ambiguous remarks made through the media.
The United States quickly dismissed Tehran's reply as "inadequate." In response, an IAEA spokeswoman said the proposal was still on the table, apparently cautioning the West not to write off the deal or more diplomacy to salvage it.
"I hope agreement will be reached and I continue to work as intermediary. This will...help increase confidence in the [Iran] nuclear issue," Amano told a panel on nuclear proliferation in Davos.
Russia and China have also called for more negotiations, opposing further punitive sanctions which they believe may hinder a peaceful solution. Neither sees Iran as an imminent nuclear threat, unlike Western powers.
Under the draft plan, Tehran would transfer 70 percent of its low-enriched uranium (LEU) abroad for conversion into special fuel rods to keep a nuclear medicine reactor running.
The arrangement aimed to reduce Iran's LEU reserve below the quantity needed for the fissile core of a nuclear weapon, if the material were refined to a high degree of purity.
But after first accepting the scheme in principle, Tehran backed off by demanding amendments which entail swapping its LEU for reactor fuel only in small, staggered amounts and on Iranian soil -- to avoid a significant reduction in the LEU stockpile.