Iranian President Mahmoud Ahmadinejad said on Thursday his country is ready to cooperate with Western powers on nuclear fuel and technology, but will not retreat "one iota" on its nuclear rights.

"We welcome the fuel exchange, nuclear cooperation, building of power plants and reactors and we are ready to cooperate," Ahmadinejad said in a live broadcast on state television as Tehran is to present its formal response to a UN-drafted deal in Vienna today.

The draft is designed to help allay Western fears that Iran is seeking to build nuclear weapons, a charge Tehran denies.

But Ahmadinejad added Iran would not retreat "one iota" on its nuclear rights, and that the provision of nuclear fuel to a Tehran reactor would test the "honesty" of world powers.

The draft agreement circulated by the UN nuclear watchdog, the International Atomic Energy Agency, would have Iran send out 80% of its 1.5 metric tons of low-enriched uranium to Russia, where it would be enriched, and to France to convert it into fuel plates for a research reactor in Tehran.

The nuclear fuel deal was proposed by IAEA chief Mohamed ElBaradei following the October 11 talks between Iran and six world powers in Geneva, where Iran also agreed to allow UN inspectors access to its new enrichment facility.

Local media have, however, said Tehran will accept the framework of the deal, but will also demand changes to it.

Western powers have called for harsher sanctions against the Islamic Republic over its uranium enrichment activities, suspecting the country of pursuing a covert weapons program. Tehran has denied the suspicions saying it needs enrichment technology to generate electricity.

"Fortunately, conditions have been created for nuclear cooperation at an international level," Ahmadinejad said on Thursday in commenting on the UN draft agreement.