BBC News Online world affairs correspondent
The new offer is likely to assure Iran it will get nuclear fuel
Talks are being held in Washington on Friday between senior US and European officials about offering Iran incentives to give up its ambitions of enriching uranium.
If agreed, and it is a big if, it would represent a slight softening of the US position which until now has stressed sticks not carrots. It wants Iran taken to the UN Security Council for possible sanctions and is not that enthusiastic about making new offers.
Nor is the Bush administration likely to agree anything which could be seen as a move towards accepting Senator John Kerry's policy of negotiating with Iran.
However, with US policy virtually on hold until after the presidential election on 2 November, even the hardliners are willing to let this new attempt play out. One of them, John Bolton, the Under Secretary for Arms Control, will be at the talks.
The talks come amid a mood of some desperation among Western policy makers over Iran's nuclear programme.
Efforts to get Iran to abandon its enrichment activities have been a failure so far, yet prospects of imposing effective sanctions on Iran through the UN Security Council are uncertain to say the least.
And in the background there is the constant rumble of Israeli comments that Iran represents a threat that must be dealt with, possibly by a military strike.
The latest Israeli warning came in a report from the Tel Aviv think-tank, the Jaffee Centre for Strategic Studies.
Its deputy head Ephraim Kam said: "There is a logic to operating against Iran. Just taking out the facilities that are known would create a serious degradation of the Iranian potential."
There is no great optimism that an offer to Iran would work given Iran's insistence that it will develop an enrichment capability, which it says will be used only for nuclear fuel, not for nuclear weapons.
Iran says no international body can force it to end enrichment
Iran restated its intentions again this week.
Its Foreign Minister Kamal Kharrazi said: "The time has come for Europe to take a step forward and suggest that our legitimate right for complete use of nuclear energy is recognised (in exchange for) assurances that our programme will not be diverted toward weapons."
Britain, France and Germany, the three European countries which have made offers to Iran in the past, now feel there is a window of opportunity between the election and a meeting of the UN nuclear agency, the International Atomic Energy Agency (IAEA), on 25 November.
Even if the attempt fails, they believe, it would be better than not trying at all. At the very least, it would show that a final effort had been made before any resort to the UN Security Council.
The offer would consist of assurances that Iran would be provided with nuclear fuel.
Russia is currently discussing such a deal with Iran, hinging on the proviso that the spent fuel is returned for re-processing in order to avoid its possible use for nuclear weapons.
The new offer might be made by the G8 group of industrialised countries as a whole so that other potential suppliers would be brought in.
Beyond that, Iran would be encouraged to expand its trade links with the rest of the world, especially through new agreements with the European Union.
'North Korean scenario' fears
The problem has thrown up the flaw in the Nuclear Non Proliferation Treaty (NPT), which seeks to limit the spread of nuclear weapons while allowing the spread of nuclear energy.
Under the treaty, a country is allowed to enrich uranium to the level needed for fuel but not to the level needed for nuclear weapons.
The risk is that it could use its expertise to make nuclear weapons either secretly or by simply withdrawing from the treaty, as North Korea has done.
Iran is insisting on its right to enrich for fuel but has weakened its case by hiding its activities in the past.
The IAEA has urged it to suspend its plans for enrichment as a sign of good faith while more rigours inspection systems are put in place.
This has turned into a complex game of chess with the endgame beginning to come into view.