Iran today raised hopes of a negotiated settlement to end the crisis over the Islamic Republic’s controversial nuclear programme, which could be frozen in return for concessions from the West.

In a remarkably conciliatory new tone from Tehran, influential hardliners welcomed a recent package of incentives offered by six major world powers.

“We see the possibility of arriving at a multi-faceted solution,” Manouchehr Mottaki, Iran’s foreign minister told a press conference at the United Nations in New York. Ali Akbar Velayati, a top adviser to Ayatollah Ali Khamenei, Iran’s Supreme Leader, also insisted that a “compromise” could be found.

Both men have led public statements on the nuclear issue in recent days while Mahmoud Ahmadinejad, Iran’s uncompromising president, has kept a low profile.

The shape of a possible face-saving compromise that would open full negotiations is now becoming clearer. A report on Fararu, an unofficial Iranian news agency close to influential opponents of Mr Ahmadinejad, said Tehran may be willing to limit uranium enrichment for a six-week period to pave the way for fully-fledged negotiations. The report has not been officially confirmed by Iran but is being taken seriously by Iranian analysts. The so-called “freeze for freeze” mechanism is similar to a “timeout” suggestion first made in January by Mohamed ElBaradei, the head of the International Atomic Energy Agency.

The Foreign Office in London tonight confirmed to The Times that the major world powers would refrain from any further action against Tehran at the UN Security Council if Iran refrained from any new nuclear activity, including the installation of more centrifuges for uranium enrichment. This offer was part of an incentives package offered to Iran last month by the US, Britain, Russia, China, France and Germany.

It was “part and parcel of any pre-negotiations which would be limited to six weeks to prepare for the opening of any formal negotiations,” the Foreign Office spokesman said. “We’ve had no formal acceptance [from Iran of the overall] offer yet.” The international community has refused so far to negotiate with Iran unless it first suspends uranium enrichment while Tehran has repeatedly rejected the condition as an unacceptable “red line”.

Mr Mottaki said Iran was studying with “constructive regard” the package deal hand-delivered to Tehran last month by Javier Solana, the EU’s foreign policy chief, and would respond formally within two weeks.

Mr Velayati, referring to the US, said: “Those who are agitating against our interests want that we reject the [international] offer. As a consequence, it’s in our interests to accept it.”

The international offer includes technological, political and economic incentives -- provided Tehran suspends uranium enrichment. Senior Iranian figures promptly rejected this condition but expressed some interest in the rest of the deal. Iranian state television has aired discussions on the offer in a far more open manner than usual, allowing the benefits of compromise to be debated.

Mr Solana today described Iran’s reaction as “interesting” but said he wanted to see an official reply. The White House remained doubtful of the sincerity of Mr Mottaki’s apparently positive stance.

“I think we have every reason to be sceptical since we get mixed messages from them quite often,” Dana Perino, the White House spokeswoman said.

Iran’s critics suspect Tehran’s often divided leadership is playing for time to stave off further sanctions while it proceeds with its nuclear programme, or that it has been unnerved by military threats.

Recent large scale Israeli military exercises heightened fears that Israel was readying for an attack on Iran’s nuclear sites, while Shaul Mofaz, Israel’s deputy prime minister, said last month that Israeli strikes on Iran looked “unavoidable” given Tehran’s nuclear progress. John Bolton, the US’s former UN ambassador, has suggested that Israel could attack Iran between the US elections on November 4 and January.

But others believe Tehran is sincere: it wants to eliminate any risk of a US attack for the remainder of the Bush administration and in the meantime improve the atmosphere between Tehran and Washington in preparation for better relations with Washington if Barack Obama wins the White House.

President Bush said diplomacy was his first option to address the stand-off but repeated that “all options” - code for military action was still on the table.

Mr Mottaki shrugged off such talk as “psychological warfare”, insisting the US would not “resort to such craziness while its economy suffers and it is bogged down in wars in Afghanistan and Iraq”. Israel was in too much political turmoil to attack Iran, he added.

Military tensions have driven oil to record prices of over $140 a barrel. The US served warning today that it will not allow Iran to choke off the entrance to the Persian Gulf after Iranian military commanders threatened to block oil shipments if their country is attacked over its nuclear programme.

Nearly 40 per cent of the world’s oil exports and a significant amount of natural gas pass through the Strait of Hormuz at the entrance to the Gulf.

“I believe... Iran will not attempt to close the Strait of Hormuz and we will not allow them to close the Strait of Hormuz. I can’t say it any more clearly than that,” Vice Admiral Kevin Cosgriff, the commander of the US Navy’s Fifth Fleet, said today.

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