The United States and key allies urged Iran Wednesday to follow up on a surprise U-turn from President Mahmoud Ahmadinejad by formally committing to a UN-brokered deal to swap enriched uranium for nuclear fuel.

But there was also alarm and the renewed threat of new sanctions as Ahmadinejad's apparent overture to the West on the nuclear issue was quickly followed by a rocket launch deemed by the White House "a provocative act."

Ahmadinejad bamboozled his critics on Tuesday by suggesting that a deal struck last October envisaging Iran sending some 70 percent of its low-enriched uranium abroad was suddenly back on.

Conscious his remarks could simply be timed to stave off new sanctions at an upcoming meeting of world powers, the White House urged Iran to contact the International Atomic Energy Agency (IAEA), the UN watchdog that brokered the deal.

"If those comments indicate some sort of change in position for Iran, then president Ahmadinejad should let the IAEA know," said deputy White House spokesman Bill Burton.

Iran needs nuclear fuel to power its UN-monitored reactor, but the West fears its uranium enrichment program is masking efforts to produce atomic weapons -- claims vehemently denied by the Islamic republic.

The IAEA has proposed, in a bid to allay Western fears about Iran's atomic ambitions, that Tehran ship out its low-enriched uranium (LEU) to Russia and France to be further purified into reactor fuel.

Iran, which agreed in principle to the offer during talks with world powers in Geneva in October, later appeared to reject the deal and said it preferred a gradual swap of LEU with fuel -- preferably on Iranian soil.

It had given the West until January 31 to respond to its counter-proposals.

The apparent change of heart received a cautious welcome from the P5+1 -- UN Security Council veto-wielding permanent members Britain, China, France, Russia and the United States plus Germany -- which has been leading international efforts to engage Iran.

"The IAEA made a good-faith offer regarding the Tehran research reactor. Iran initially accepted the arrangement, but has not followed through and, in fact, seemed to move toward rejecting it," said US Secretary of State Hillary Clinton.

"The deal is still on the table," Clinton said. "If Iran wishes to accept it, we look forward to hearing about it from the IAEA, because that's the appropriate venue for them to file an official response."

Britain's Foreign Office said: "If Iran is willing to take up the IAEA's proposed offer, it would be a positive sign of their willingness to engage with the international community on nuclear issues."

But it said that desire must be made "clear" to the IAEA and Ahmadinejad's comment "does not change" the need for Iran to hold talks with the P5+1.

"Iran has to make concrete commitments to the IAEA and a concrete answer in Vienna is the only measure on which it can be assessed," German government spokesman Ulrich Wilhelm said.

But hours after Ahmadinejad said on state television that Iran would have "no problem" sending its stocks of low-enriched uranium abroad, the launch of a new Iranian space rocket drew fresh international criticism.

"This announcement can only reinforce the concerns of the international community as Iran in parallel develops a nuclear program that has no identifiable civil aims," a French foreign ministry spokesman said.

The launch Wednesday of the Kavoshgar 3 (Explorer) rocket -- a home-built satellite carrying a rat, turtles and worms -- was Iran's first experiment with such space technology.

The West suspects Iran is secretly trying to build an atomic bomb and fears the technology used to launch space rockets could be diverted into developing long-range ballistic missiles capable of carrying nuclear warheads, another charge Iran strongly denies.

The United States said Tuesday it hoped to consult with China and the other P5+1 powers in coming days on the Iranian nuclear issue, but gave no precise date for a meeting.

If Ahmadinejad was simply paying lip-service to a deal to try and avoid stiffer sanctions then the move appeared to have back-fired with both US Defense Secretary Robert Gates and the French Prime Minister Francois Fillon warning of tough new measures.

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