The proposal, which Russia offered to Iran at the end of last year, "is being discussed now" and "has been confirmed by Iran's leaders," the Itar-Tass news agency quoted Iranian Ambassador Gholam Reza Ansari as saying.

Ansari further said, "unfortunately, the development of Iran's nuclear program has not allowed us to create favorable conditions for conducting detailed talks on this issue."

"We have no problems related to fuel purchase in Russia or in other international centers. But we are determined to use this technology because this issue is closely linked to our country's independence in the future," the ambassador said.

Last December, Moscow proposed to establish a joint venture in Russia to enrich uranium for Iran in a bid to remove Western fears that Iran would divert the nuclear technology into making nuclear bombs. Rounds of talks on the proposal were held earlier this yearin Russia and Iran without any visible breakthrough.

In order to encourage Tehran to suspend its uranium enrichment, Britain, China, France, Russia, the United States and Germany put forward an international package in mid-June, offering incentives and multilateral talks to Iran.

Despite international calls for a speedy reply, Iran rejected an earlier deadline for its response and said it would give a formal reaction by Aug. 22.

A UN Security Council resolution, adopted last week to increase pressure on Iran to accept the package, urges Tehran to stop uranium enrichment by August 31 and warns of possible economic and diplomatic sanctions if it fails to do so.

But Iran on Sunday rejected the UN Security Council ultimatum on the suspension of uranium enrichment.

"The United Nations has no right to ask Iran to halt enrichment, Iran has not violated any obligations under the Non-Proliferation Treaty (NPT), so we will reject the resolution," Iran's chief nuclear negotiator Ali Larijani told a news conference in Tehran.

The U.S. accuses Iran of secretly developing nuclear weapons under a civilian front, but Iran insists that its nuclear program is aimed at generating power to meet its surging domestic demand.