The Arak heavy water reactor is expected to be completed by 2009

Tehran will allow inspectors into Arak heavy water plant and agree safeguards at its Natanz uranium enrichment plant, the UN nuclear watchdog said.

The agency's deputy director described the deal as a framework for resolving a range of nuclear issues with Iran.

Iran says its nuclear programme is for civilian purposes, not bomb-making.

The EU and US, however, accuse the Islamic republic of seeking to build nuclear weapons and have demanded it suspend its uranium enrichment activities.

The UN Security Council has imposed two rounds of sanctions on Iran for not doing so, and is now considering a third round.

The BBC's Bethany Bell, in Vienna, where the International Atomic Energy Agency is based, says a number of significant questions about its nuclear work could be cleared up if Iran holds to this deal.

However Tehran is still enriching uranium, in defiance of the UN Security Council - the key sticking point between the West and Iran, and one not dealt with by the latest agreement.

Discussions

Ollie Heinonen, the deputy director of the IAEA, announced the deal after meeting two senior Iranian negotiators in Tehran this week.

Under the terms of the deal a new team of nuclear inspectors will be put together.

That team would then be granted access to the heavy water reactor plant at Arak before the end of July, Mr Heinonen said.

The head of the IAEA, Mohammed ElBaradei, has said that deals such as this will serve as a way to defuse the ongoing diplomatic crisis over Iran.

Heavy water reactors produce plutonium, which can be used in nuclear weapons as an alternative to enriched uranium.

Located some 190km (120 miles) south-west of Tehran, the reactor has long been a bone of contention between Iran and the West.

Arak was one of two Iranian nuclear facilities the existence of which was revealed by an exiled Iranian opposition group in 2002. At that stage Iran had failed to declare its existence to the IAEA.

Heavy water is used to moderate the nuclear fission chain reaction either in a certain type of reactor - albeit not the type that Iran is currently building - or produce plutonium for use in a nuclear bomb.

The project is scheduled to be completed by 2009.

The IAEA also said it had agreed with Iran on the designation of new inspectors as well as how to deal with safeguards at the Natanz uranium enrichment plant.