European Union states are reportedly considering reviving an offer to Iran of a light-water nuclear reactor to persuade it to halt uranium enrichment.
Iran says its nuclear programme is for peaceful purposes
Britain, France and Germany will raise the idea with the US, China and Russia on Friday, an unnamed EU diplomat says.
The EU is preparing a new package of measures that it hopes will convince Iran to curb its nuclear ambitions.
The EU and the US fear that Iran - despite its denials - is actually trying to develop nuclear weapons.
Iran says its nuclear programme is aimed at meeting its energy needs only and insists on its right to enrich uranium.
In February 2005, Iran dismissed a European offer to replace its heavy-water nuclear reactor under construction with a light-water reactor, saying it wanted to be a major player in nuclear fuel supply in 15 years.
The EU's work on a new package of incentives comes as the US and some European governments seek a tough resolution on Iran at the UN Security Council.
Both China and Russia - both veto-holding members of the Security Council - do not want to support any resolution that might eventually lead to further resolutions threatening sanctions or military action.