Iran offer is negotiable if enrichment stops-Merkel

BERLIN, June 7 (Reuters) The terms of an offer of incentives delivered to Iran to end a dispute over its nuclear programme can be negotiated but only if Tehran halts enrichment work first, Germany's chancellor said today.

''This is an offer to kick off negotiations but there must first be a suspension of (enrichment) activities implemented by Iran,'' Chancellor Angela Merkel told reporters before a meeting with European Union foreign policy chief Javier Solana.

''It is a broad and comprehensive offer. I believe it is a huge chance and I hope that we'll do a bit of negotiating.'' Solana delivered the offer to Tehran yesterday, along with a delegation of senior officials from the ''EU3'' -- France, Britain and Germany -- and from Russia.

The proposals, which have not been made public but include incentives and penalties, seek to persuade Iran to give up enriching uranium, which the West fears will be used to build atomic bombs. Tehran says its nuclear aims are civilian.

Iran's chief nuclear negotiator, Ali Larijani, said the offer contained some ''positive steps'' but complained that there were some ambiguities that needed to be corrected.

Merkel urged the Iranians to consider the offer seriously, which she said was an opportunity to secure a peaceful resolution to the years-long nuclear standoff with Iran.

''I believe that it is a truly significant chance to resolve this conflict diplomatically. And everyone should be aware of his responsibility in this context,'' she said.

Iranian officials said the incentives included access to aircraft parts needed to renovate its ageing civilian airline fleet and the chance to purchase U S agricultural technology.

EU diplomats have said the package included offers of light-water nuclear reactors and security guarantees.

Western diplomats said the United States was not expected to provide nuclear technology or equipment directly to Iran.

Instead, Europeans and Russians would be the prime contractors.

Yesterday, German Foreign Minister Frank-Walter Steinmeier warned against excessive optimism and said he expected a decision from Iran by the time the Group of Eight (G8) foreign ministers meet in Moscow at the end of June.

Steinmeier said today that Iran should not try to drag out discussions of the offer, which was prepared by the EU3 and backed by Russia, China and the United States.

''We should not waste time in a back-and-forth process that lasts for months within the context of these preliminary talks,'' he told Germany's ARD public television.

REUTERS SHB BST1557