THREAT OF SANCTIONS

Iran could face U.N. sanctions if it refuses to halt its enrichment program, which it says is intended only to produce fuel for nuclear power plants, not for atomic bombs.

The U.S. ambassador to the IAEA, speaking just before the 35-nation board convened, said the ball was in Iran's court and the next decision had to emerge from Tehran, not Vienna.

"The United States and other members of the IAEA board hope this will be a decision to refrain from further enrichment-related and reprocessing activities including research and development, and to take advantage of the enormous diplomatic opportunities that lie in front of the Islamic Republic," Gregory Schulte told a news briefing.

Iran's envoy to the IAEA, Ali Asghar Soltanieh, earlier urged the body to avoid "politically motivated statements that could spoil the environment" for a diplomatic solution.

Chief Iranian nuclear negotiator Ali Larijani said on Sunday the precondition on enrichment had to be clarified.

The Iranian Foreign Ministry has said Tehran will send its own counter-proposals to the international incentive package.

Western diplomats say the deal includes a light-water reactor and an atomic fuel storage facility, as well as a rare U.S. offer to join the European Union's direct talks with Iran.

Western leaders have in the past ruled out allowing Iran any domestic nuclear fuel program. But the new package would allow for one after an open-ended halt to enrichment work, probably lasting years, and under full IAEA surveillance.

"No one is expecting fireworks. The priority is not to distract from the package on the table for Iran -- the best chance, maybe the last one, for a non-confrontational solution," said an IAEA diplomat, speaking on condition of anonymity.

Iran says its nuclear program aims to produce low-enriched uranium for electricity generation. The West suspects Iran, with the world's second largest reserves of oil and gas, is bent on enriching uranium to the high level used to make atom bombs.