Iran formally notified the UN atomic watchdog Monday of its nuclear fuel swap deal with Turkey and Brazil, as the UN chief said it could lead to a negotiated solution to the standoff with Tehran.

Delegates from the three countries handed a letter to the Vienna-based International Atomic Energy Agency (IAEA) about the May 17 deal, which has been played down by Western governments pushing for more sanctions on Iran.

IAEA director general Yukiya Amano met the representatives "who joined to deliver a letter signed by the head of the Atomic Energy Organisation of Iran, Ali Akbar Salehi," agency spokeswoman Gill Tudor said.

The IAEA did not immediately comment on the content of the letter.

It had been waiting for a written response from Iran since Tehran signed the deal with Brazil and Turkey last week.

The accord calls for Tehran to ship around half its stock of low-enriched uranium to Turkey and months later receive a supply of more highly enriched uranium it needs for research and medical use.

Iran's uranium enrichment activities are at the heart of fears about its nuclear programme because highly enriched uranium of over 90 percent purity can be used to make an atom bomb.

Western governments have been dismissive of the new swap deal, saying it fails to address concerns about Iran's nuclear programme which Tehran insists is for civilian purposes.

The letter handed to the IAEA Monday "follows from the joint declaration signed by the three countries in Tehran on May 17, regarding fuel supply for the Tehran Research Reactor," Tudor said.

It would be conveyed to the United States, France and Russia "for their consideration."

The so-called Vienna Group of Washington, Paris and Moscow offered in October to ship most of Iran's low-enriched uranium out of the country in return for higher grade reactor fuel to be supplied by Russia and France.

But Iran stalled on the UN-brokered deal, insisting it wanted a simultaneous swap on its own soil, which was rejected by world powers.

Tehran notification of the new deal is to be reviewed by the IAEA and the UN Security Council.

"If accepted and implemented, it could serve as an important confidence-building measure and open the door for a negotiated solution to the Iranian nuclear issue," UN chief Ban Ki-moon told reporters.

But the UN secretary-general insisted Tehran "should show greater transparency about its nuclear programme" and stressed the "importance of Iran's full cooperation with the IAEA and full compliance with relevant Security Council resolutions."

The United States said it had received a copy of the letter and the IAEA had requested its reaction.

"We are consulting with our partners and expect to respond to the IAEA very soon," State Department spokesman Philip Crowley told reporters.

The United States is spearheading efforts by six major powers to slap fresh sanctions against Tehran over the nuclear standoff.

Iran has faced three rounds of UN Security Council sanctions since President Mahmoud Ahmadinejad came to power in 2005 for having defied calls to suspend sensitive uranium enrichment work.

Turkey meanwhile called on world powers Monday to help see through the fuel swap deal and said it was ready "to continue its contributions for a peaceful solution to the issue."

Brazilian President Luiz Inacio Lula da Silva said the deal was meant only to allow for talks with Iran over its controversial programme, not to single-handedly resolve the underlying concerns.

"Obviously, this plan is an opening for the start of negotiations. As such, I think it (Iran) has made an important step," he said.

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