DUBAI (Reuters) - U.S.-allied Gulf Arab states are willing to set up a body to provide enriched uranium to Iran to defuse Tehran’s stand-off with the West over its nuclear plan, Saudi Arabia’s foreign minister told a magazine on Thursday.

Saudi Foreign Minister Prince Saud al-Faisal speaks during a news conference in Jeddah August 7, 2007. U.S.-allied Gulf states are willing to set up a body to provide enriched uranium to Iran to defuse Tehran's stand-off with the West over its nuclear plan, the prince told a newspaper on Thursday. REUTERS/Susan Baaghil

Saudi Arabia and other Gulf countries -- Kuwait, Oman, Qatar, Bahrain and the United Arab Emirates -- share Western concerns that Iran’s nuclear energy program will lead to it acquiring atomic bombs, a claim Tehran denies.

“We have proposed a solution, which is to create a consortium for all users of enriched uranium in the Middle East,” Foreign Minister Prince Saud al-Faisal told the Middle East Economic Digest (MEED).

“The U.S. is not involved, but I don’t think it (would be) hostile to this, and it would resolve a main area of tension between the West and Iran,” he told the London-based weekly.

“(We will) do it in a collective manner through a consortium that will distribute according to needs, give each plant its own necessary amount, and ensure no use of this enriched uranium for atomic weapons,” Prince Saud said, according to MEED’s Web site.

Prince Saud, speaking on Thursday during a visit to Britain, said Iran was considering the offer, which envisages building a plant in a neutral country.

“We believe it should be in a neutral country -- Switzerland, for instance,” said Prince Saud. “Any plant in the Middle East that needs enriched uranium would get its quota. I don’t think other Arab states would refuse. In fact ... other Arab countries have expressed a desire to be part of the proposal.”

“They (Iran) have responded that it is an interesting idea and they will come back to us. We hope the Iranians will accept this proposal. We continue to talk to them and urge them not only to look at the issue from the perspective of the needs of Iran for energy, but also in the interests of the security of the region.”

There was no immediate comment on the proposal from Tehran, which has consistently refused to heed U.N. demands to halt its own nuclear enrichment.

The six Gulf Arab states have announced plans to start their own nuclear energy program, raising concern over an arms race in the world’s top oil exporting region.

MEED said that under the plan, the facility would produce nuclear fuel that the consortium would supply to Middle East states seeking to use atomic energy.

Many countries in the region say they are looking to nuclear energy to help them meet growing electricity demand.