The IAEA has proposed exporting most of Iran's low-enriched uranium
The UN's nuclear watchdog has said it hopes an agreement with Iran can be reached soon, as Tehran responded to a new offer on uranium refinement.
The International Atomic Energy Agency (IAEA) said it received Iran's reply to the UN-backed proposal on Thursday.
Under the plan, most of Iran's enriched uranium would be sent abroad to be turned into fuel rods for research use.
No details of Iran's reply have been given but its president said it was ready to co-operate with the proposal.
Iran says it is enriching uranium for fuel, but the US and its allies have accused it of seeking nuclear weapons.
'Confrontation to co-operation'
The IAEA director general, Mohamed ElBaradei, confirmed it had received Iran's reply.
The IAEA said in a statement: "The director general is engaged in consultations with the government of Iran as well as all relevant parties, with the hope that agreement on his proposal can be reached soon."
NUCLEAR FUEL CYCLE
Mined uranium ore is purified and reconstituted into solid form known as yellowcake
Yellowcake is converted into a gas by heating it to about 64C (147F)
Gas is fed through centrifuges, where its isotopes separate and the process is repeated until uranium is enriched
Low-level enriched uranium is used for nuclear fuel
Highly enriched uranium can be used in nuclear weapons
Although no details have been supplied, Iran's Isna news agency earlier quoted Iran's ambassador to the IAEA, Ali Asghar Soltanieh, as saying only that Iranian "economic and technical concerns regarding the supply of fuel for the research reactor [in Tehran] should be addressed".
Observers in Tehran say the government is expected to demand significant changes to the IAEA proposal while accepting the overall framework.
The BBC's Bethany Bell in Vienna, where the IAEA is based, says Iranian media reports suggest Tehran may not want to ship out all its enriched uranium in one go - a condition Russia, France and the United States may not want to accept.
Iranian President Mahmoud Ahmadinejad described the IAEA proposal as a move from "confrontation to co-operation" by Western powers.
"We welcome fuel exchange, nuclear co-operation, building of power plants and reactors and we are ready to co-operate," Mr Ahmadinejad said in a televised speech in the city of Mashhad.
However, he also said Iran would "not retreat even an iota" over its right to develop a nuclear programme.
The IAEA has proposed exporting most of Iran's enriched uranium to Russia and France, where it would be converted into fuel before being returned to Iran.
The plan was agreed by the US, Russia and France after talks in Vienna last week, but Iran missed a deadline to respond on Friday.
For Western powers, the proposal would buy time while they press for a definitive solution to the stand-off over Iran's nuclear ambitions.
Meanwhile, a delegation of IAEA inspectors returned after visiting Iran's recently-revealed second uranium enrichment plant at Fordo, near Qom.
"We had a good trip," said delegation head Herman Nackaerts.
He did not answer specific questions about any of the data that was gathered, saying it had yet to be analysed.