Gulf states are willing to set up a body to provide enriched uranium to Iran, Saudi Arabia's foreign minister is reported to have said.
Prince Saud said the plan was meant to stop a nuclear arms race
Prince Saud al-Faisal told the Middle East Economic Digest (MEED) the plan could defuse Tehran's stand-off with the West over its nuclear programme.
The prince was quoted as saying that Iran was considering the Gulf states' offer, but the US was not involved.
The BBC's Paul Reynolds says it is doubtful the plan will go anywhere.
It is similar to one proposed by Russia in December 2005, which led to initially positive talks between Moscow and Tehran, but in the end led nowhere, says our world affairs correspondent.
'An interesting idea'
Prince Saud said the offer came from the six states that make up the Gulf Cooperation Council (GCC) - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
"We have proposed a solution, which is to create a consortium for all users of enriched uranium in the Middle East," he was quoted as saying.
The US claims Iran is developing nuclear weapons
"[We will] do it in a collective manner through a consortium that will distribute according to needs, give each plant its own necessary amount, and ensure no use of this enriched uranium for atomic weapons."
He outlined the plan in an interview for the MEED during Saudi King Abdullah's state visit to London.
Prince Saud said the GCC had developed the proposal to stave off a nuclear arms race in the Gulf.
Iran says its nuclear programme is for civilian energy purposes, but the US claims Tehran is developing nuclear weapons.
Prince Saud is reported to have said: "They [the Iranians] have responded that it is an interesting idea and they will come back to us.
"The US is not involved, but I don't think it would be hostile to this, and it would resolve a main area of tension between the West and Iran."
The UK foreign office said the five permanent UN Security Council members - the US, China, Russia, France and Britain - along with Germany would meet on Friday in London to discuss the next step on Iran's nuclear programme.