Iranian President Mahmoud Ahmadinejad has agreed "in principle" to a Brazilian role in breaking the deadlock over a U.N.-backed nuclear fuel swap with the West.

Under the U.N. plan first put forward in 2009, Western powers would send nuclear fuel rods to a Tehran reactor in exchange for Iran's stock of lower-level enriched uranium. The U.S. and its allies fear Iran's disputed nuclear program aims to build nuclear weapons, and view the swap as a way to curb Tehran's capacity to do so.

Iran, which insists its nuclear program only aims to generate electricity, rejected the original exchange proposal. At the same time, the country's leaders have worked to keep the offer on the table, proposing variations, though without accepting the terms set in the U.N. proposal.

A statement posted on Ahmadinejad's website late Tuesday said during a telephone conversation with Venezuelan President Hugo Chavez, the Iranian president "announced his agreement in principle" to Brazilian President Luiz Inacio Lula da Silva's mediation proposal.

However, a spokesman for Brazil's Foreign Ministry said Wednesday Brasilia had not made an official offer to mediate yet, but that Brazil was ready to help with talks any way it can.

During a trip to Tehran last week, Brazil's foreign minister said that an exchange of fuel between Iran and the West could take place in Brazil, if his country was asked to host the exchange.
An emerging world player, Brazil has urged Western nations to negotiate a fair solution with Iran over its nuclear program. It has also called on Tehran to provide guarantees that its nuclear program has no military ambitions in return for enjoying its right to have peaceful nuclear technology.

Under the original U.N. proposal, Iran was to send 2,420 pounds (1,100 kilograms) of low-enriched uranium abroad, where it would be further enriched to 20 percent and converted into fuel rods, which would then be returned to Iran. Sending its low-enriched uranium abroad would leave Iran with insufficient stocks to enrich further to weapons-grade level.

Tehran needs the fuel rods to power a research reactor in the Iranian capital that makes nuclear isotopes needed for medical purposes. Once converted into rods, uranium can no longer be used for making weapons.

Iran has made several counteroffers to the West, including one to swap smaller batches of Iran's low-enriched uranium.
The U.S. and its allies are pushing for tougher sanctions in the Security Council over Tehran's refusal to halt uranium enrichment — a process that can lead to nuclear weapon making.

Brazil, which is currently a non-permanent member of the Security Council, opposes a new round of sanctions, insisting that only talks will resolve the impasse.

On Monday at the U.N., Brazil's foreign minister told his Iranian counterpart, Manouchehr Mottaki, that Iran needs to have more "flexibility" in nuclear talks, according to the privately run Agencia Estado news agency.