"They're not in trouble over the TRR (Tehran Research Reactor) deal. So fixing the refuelling for that reactor is not going to put them straight in the eyes of the international community," one western diplomat said, speaking on condition of anonymity.

Iran is already under three sets of UN sanctions for refusing to halt its uranium enrichment, which the West fears hides a covert nuclear weapons programme. Tehran insists it will go ahead with enrichment, even after signing the fuel deal.

"It was Iran in the first place who approached the IAEA (International Atomic Energy Agency) because they needed the fuel," another diplomat said.

"They need that fuel, but they've held out on a deal for eight months now. They're not under sanctions over the TRR. They're under sanctions for refusing to halt uranium enrichment, people shouldn't forget that."

Iran announced that it had signed an agreement with Brazil and Turkey, whereby it would ship 1,200 kilogrammes (2,640 pounds) of low-enriched uranium to Turkey in return for fuel for a reactor in Tehran that makes radioisotopes for cancer treatment.

The deal appeared to mark a breakthrough in long-stalled discussions over the refuelling of the research reactor.

The IAEA has been trying to persuade Iran since October to sign a deal with the United States, France and Russia that would see Iran's stockpile of low enriched uranium shipped out of the country and then turned into fuel for the research reactor.

But Iran has so far stalled on the deal, insisting it wants to keep the uranium on its own soil for a simultaneous swap with reactor fuel.

Uranium enrichment is at the centre of western suspicions over Tehran's atomic programme, because in a highly purified form, it can be used to make the fissile material of a nuclear bomb.

Under the new agreement, signed by Iran, Turkey and Brazil and a copy of which was obtained by AFP, Tehran is ready to deposit 1,200kg of low enriched uranium "within one month".

In return, the United States, France and Russia would deliver 120kg of fuel required for the reactor "in no later than one year".

The IAEA made no immediate comment to make on the deal, neither did the US, French and Russian missions to the agency.

Turkish Foreign Minister Ahmed Davutoglu said there was "no need" for further UN sanctions against Iran in the light of the deal.

"This agreement should be regarded positively and there is no need for sanctions now that we (Turkey and Brazil) have made guarantees and the low enriched uranium will remain in Turkey," he said.

"This agreement sends the international community a message that there is always room for diplomacy. Turkey and Brazil showed that it was time for diplomacy," he said.

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