If the international community showed the necessary political will the dispute with Iran over the proposed nuclear fuel exchange could be resolved, Tehran's foreign minister said on Tuesday.

The IAEA-sponsored deal to supply nuclear fuel for a research reactor in Tehran proposes Iran ship low-enriched uranium to Russia and then France to be processed into higher-grade nuclear fuel and then returned to Iran.

The deal was approved by Russia, France and the United States but rejected by Iran, which proposed a simultaneous exchange, and began enriching uranium itself in lieu of an agreement.

"The fuel exchange deal that was proposed by the former head of IAEA...has been on the agenda for some time. However, improper...propaganda regarding the realization of this proposal forced it to be taken off the agenda," Iranian news agency ISNA quoted Manouchehr Mottaki as saying after talks with new International Atomic Energy Agency head Yukiya Amano.

"Since February, the issue of the uranium exchange has been discussed between different parties and we said that [the Iran Six] showing political will would contribute to the realization of this proposal," the foreign minister added.

The IAEA chief is now consulting the six countries - Russia, the United States, France, Britain, Germany and China - negotiating with Iran over its nuclear program, and they should now define their position on the nuclear exchange, Motaki said, adding that the consultations were initiated by Teheran.

Iran needs 20% enriched uranium fuel for its Tehran research reactor and the country's nuclear chief said in February that from 3-5 kilograms of enriched uranium were being produced for the research reactor every month. The reactor, which produces isotopes for medical use, needs only 1.5 kilograms of nuclear fuel per month.

The United States and other Western countries suspect Iran of developing nuclear weapons under the guise of a civilian nuclear energy program and are seeking new sanctions following Iran's move to enrich uranium to 20%.

Russia and China have repeatedly opposed new sanctions against Iran, saying the issue should be resolved through diplomacy.