Iran and Russia have signed a nuclear fuel agreement, paving the way for Tehran to get its first reactor up and running.

Iranian Vice-President Gholamreza Aghazadeh and Alexander Rumyantsev, the head of Russia's Federal Atomic Energy Agency, signed the agreement at the Bushehr nuclear power plant in Iran.

The signing was delayed by a day, and came after the two senior officials toured the US$800-million complex.

Russia, which helped build the plant, has agreed to provide the fuel needed to run the Bushehr plant, but wants the spent fuel returned to prevent any possibility Tehran would extract plutonium from it - enough of which could be used to make an atomic bomb.

Tehran has agreed, but the two disagreed on who should pay for its return.

The signing came a few days after a summit between US President George Bush and Russian President Vladimir Putin in Slovakia, which touched on American concerns over Russian support for Iran's nuclear programme.

Washington has accused Tehran of covertly trying to build a nuclear bomb, which Iran denies.

Delay in signing

It was not immediately clear whether Thursday's Bush-Putin summit had delayed the signing, which had been expected on Saturday, but Muhammad Saeedi, deputy head of Iran's Atomic Energy Organisation said "the Bush-Putin talks did not have an effect on the agreement. Our talks [with the Russians] have been successful".

"The deal signed proves that Russia is confident that the Iranian nuclear development is for peaceful purposes only", says Alexander Netshayev, political analyst for the Moscow based Itar-Tass news agency speaking to Aljazeera.net.

"The president has been telling Bush for a while that Russia's own priority was for the spent fuel to be returned back to them and this deal makes that clear. I don't think the president felt much pressure from the Americans," he added.

Touring the plant

Just before the signing, Iran's Aghazadeh showed the head of Russia's Federal Atomic Energy Agency the nuclear fuel storage house as well as the main part of the plant and the reactor expected to be operational by late 2005 or early 2006.

"What I saw was much better and more than I had expected. Assembling operations in the past three to four months have been expedited," Rumyantsev said. Referring to the process to complete the plant, he added: "I can't say the situation is excellent, but it's very good."

Aghazadeh said the fuel storage house was constructed in accordance with international standards. "This storage house is ready to receive nuclear fuel," he said.

Iranian efforts to enrich uranium so it can produce enough of its own fuel to generate power have been a bigger concern in the international community because enrichment can be taken further to be used for warheads.

European efforts

France, Britain and Germany are trying to secure an Iranian commitment to scrap enrichment plans in exchange for economic aid, technical support and backing for Tehran's efforts to join mainstream international organisations.

Iran has suspended enrichment-related activities during the talks with the Europeans, which both sides have said were difficult, but insists the freeze will be brief.

Bush has expressed support for the European efforts.

But documents being circulated among International Atomic Energy Agency board members in Vienna before a board meeting on Monday, and seen by journalists, indicated Washington would try to increase pressure on Tehran by the next agency board meeting in June should the French, German and British talks fail.

PHOTO CAPTION

Iran's nuclear reactor in the Gulf port of Bushehr. (AFP)