Big powers to offer Iran "generous" deal

By Fredrik Dahl

TEHRAN (Reuters) - The EU's top diplomat said he would hand Iran a generous offer on Saturday aimed at resolving a deepening dispute over its nuclear ambitions that has helped push up oil prices to record highs.

European Union foreign policy chief Javier Solana arrived in Tehran late on Friday to present an incentives package agreed by six major powers last month to coax Iran into halting atomic work the West fears is aimed at making bombs.

But with the Islamic Republic voicing defiance and showing no sign of backing down, diplomats played down the prospect of a breakthrough in the long-running standoff.

Solana, who has said he expects no "miracles", said the proposals would support Iran in developing a modern nuclear energy programme and also covered political and economic ties.

"I am travelling to Tehran to present a generous and comprehensive offer," he said in a statement on Friday.

"I am convinced that it is possible to change the present state of affairs," the Spaniard said. "Our proposal is good for the future of Iran and for the future of the Iranian people."

Iran has repeatedly rejected international demands to suspend uranium enrichment, saying its atomic drive is solely aimed at generating electricity so that the world's fourth-largest crude producer can export more oil and gas.

"The outcome of these negotiations will certainly never be Iran's surrender to degrading Western demands," senior cleric Ayatollah Ahmad Khatami told the IRNA news agency.