TEHRAN (AFP) - Iran urged Western powers not to immediately refer a dispute over its nuclear program to the UN Security Council, arguing talks with Russia on a potential compromise needed "more time."

Iranian Foreign Minister Manouchehr Mottaki speaks during a press conference in Tehran. Iran urged Western powers not to immediately refer a dispute over its nuclear program to the UN Security Council, arguing talks with Russia on a potential compromise needed "more time." [AFP]

In a separate warning, the head of Iran's Revolutionary Guards said Saturday that the Islamic republic was ready to use its ballistic missiles if attacked.

Moscow's idea to enrich uranium outside Iran is seen as a way out of a growing crisis over Iran's nuclear drive and has received cautious and conditional support from the United States and European Union.

"This proposal is under review," Iranian Foreign Minister Manouchehr Mottaki told reporters.

"On some factors like increasing the number of partners, we have reached an agreement. Regarding the place or places, we are still studying it," he asserted, adding a second round of talks would be held in Moscow on February 16.

"We are seriously studying it. This proposal should be comprehensive, so it becomes a solution for the nuclear case. We need more time: we should continue the intensive talks until the IAEA meeting in March."

Russia's idea is that the sensitive nuclear fuel work -- which could potentially be diverted to produce nuclear weapons -- is conducted outside the Islamic republic as a way of preventing Iran for acquiring bomb-making technology but also guaranteeing its access to nuclear energy.

But the EU and US still want to see Iran referred to the UN Security Council when the International Atomic Energy Agency's 35-nation board of governors holds an emergency meeting in Vienna on February 2.

They also want Iran to return to a full suspension of other fuel cycle work -- namely enrichment research which Iran restarted on January 10 and uranium conversion which was restarted last August.

Russia has huge economic interest in Iran's nuclear program and is reluctant to call in the Security Council next week, preferring for the Council to be merely "informed" of developments.

But Mottaki said the meeting "should pass" without any move against Iran "in order to reach a comprehensive understanding for the March meeting."

He also warned that "referring or informing the case to the UN Security Council carries the same meaning for us."

"Regarding the possible informing of the UN Security Council as a result of the February 2nd meeting of the IAEA, the Iranian government would be obliged to stop voluntary measures," he warned.

This warning has already been spelled out as comprising of a resumption of industrial-scale enrichment and a halt in the application of the nuclear Non-Proliferation Treaty's additional protocol giving the IAEA more powers of inspection.

Iranian Revolutionary Guards chief General Yahya Rahim Safavi also issued a reminder of his ballistic missile capability -- just in case a military option was put on the table in Israel or the West.

"Iran has a ballistic missile capability of 2,000 kilometres (1,280 miles). We do not intend to attack any country, but if we are attacked we have the capability to give an effective response. Our policy is defensive," told state television.

The United States cautioned Friday that is was not 100 percent supportive of Russia's proposed compromise.

"The United States has said that we find the Russian proposal to be interesting and it might be a good way to proceed with negotiations. We've never said that we accept every detail in that proposal," said Nicholas Burns, the assistant secretary of state for political affairs.

Washington, he said, does "not believe that Iran should have the ability to exercise any process along the nuclear fuel cycle inside Iran itself."

But Britain struck a conciliatory tone ahead of the crunch IAEA meeting, saying diplomacy was the only way to solve the dispute and military action was not on the cards.

Foreign Secretary Jack Straw said Iranian negotiators appeared willing to resume talks with Western powers, and urged that any eventual deal must allow Tehran to "preserve a sense of national dignity."

"We have to have a bargain which enables both sides to come out of it with their head held high and not low," he said in a debate at Davos, where he also spoke of a "fast-changing situation."