Tehran:  Iran's nuclear chief signaled Tehran's envoys may bring a compromise offer to the talks this week with world power promising to eventually stop producing its most highly enriched uranium, while not totally abandoning its ability to make nuclear fuel.

The proposal outlined late Sunday seeks to directly address one of the potential main issues in the talks scheduled to begin on Friday between Iran and the five permanent Security Council members plus Germany.

The US and others have raised serious concerns about Iran's production and stockpile of uranium enriched to 20 percent, which could be turned into weapons-grade strength in a matter of months.

But the proposal described by Iran's nuclear chief, Fereidoun Abbasi, may not go far enough to satisfy the West because it would leave the higher enriched uranium still in Tehran's hands rather than transferred outside the country.

Abbasi said Tehran could stop its production of 20 percent enriched uranium needed for a research reactor, and continue enriching uranium to lower levels for power generation.

This could take place once Iran has stockpiled enough of the 20 percent enriched uranium, Abbasi told state TV. The 20 percent enriched material can be used for medical research and treatments.

The enrichment issue lies at the core of the dispute between Iran and the West, which fears Tehran is seeking an atomic weapon a charge the country denies, insisting its uranium programme is for peaceful purposes only.

Uranium has to be enriched to more than 90 percent to be used for a nuclear weapon, but with Iran enriching uranium to 20 percent levels, there are concerns it has come a step closer to nuclear weapons capability.

Istanbul to be venue for nuclear talks

Meanwhile, Iran confirmed that nuclear talks this week with world powers would take place in Istanbul, dropping public reservations over that city as venue following a sharp-worded row with Turkey.

If the Istanbul negotiations with the P5+1 group – the five permanent UN Security Council members and Germany – on Saturday prove fruitful, another round of talks could be held in Baghdad, the office of Iran's chief nuclear negotiator, Saeed Jalili, said in a statement.

"The first round of talks between Iran and the P5+1 will be held on April 14 in Istanbul and a second round will be held in Baghdad" at a date to be mutually agreed, said the statement from the Supreme National Security Council headed by Jalili.

The confirmation appeared to put an end to Iran's see-sawing position on Istanbul that cast a cloud of doubt over the talks in recent days.

Tehran had at first enthusiastically embraced the Turkish city as the ideal venue for the talks. US Secretary of State Hillary Clinton even went as far as to declare that city as the host of the talks.

But last week Iranian officials and politicians suddenly went cold on it, saying Turkey's support of the opposition in Syria -- Iran's chief ally -- excluded Istanbul as a venue. They proposed Baghdad instead, or possibly Damascus or Beijing.

That earned an unexpectedly virulent rebuke from Turkish Prime Minister Recep Tayyip Erdogan, who had visited Tehran just days earlier to discuss the talks with Iran's leaders.

"It is necessary to act honestly," Erdogan said last Thursday.

"They (the Iranians) continue to lose prestige in the world because of a lack of honesty," he stormed.

By Monday, Iran had once again come around to accepting Istanbul as the venue. In Brussels, a spokesman for EU foreign policy chief Catherine Ashton, who is representing the P5+1, said "we have agreed to launch talks in Istanbul on April 14."

He gave no indication, though, of any discussion about further rounds of talks, or whether they would be held in Baghdad.

(Agencies)