"They will never accept the proposal as it is," one Western diplomat in Tehran said. "As usual they are playing for time."
"BLOW TO WORLD PEACE"
The United States says it wants a diplomatic solution to a standoff that has helped push oil prices to record highs but has not ruled out military action as a last resort.
Bush said on Saturday a nuclear-armed Iran would be "a major blow to world peace."
A top British official said before Solana's Tehran trip: "If they were to reject this initiative, then we would expect there to be further EU sanctions imposed before the end of July."
The three U.N. sanctions resolutions imposed so far were relatively limited in scope - including targeting individuals, some firms with military links and several banks.
Flush with record oil revenues that have helped it withstand such punitive measures, Iran has long ruled out ending its quest for its own enrichment industry.
The incentives package included help for Iran to develop a civilian nuclear programme with light water reactors - seen as harder to divert into bomb-making than technology Tehran now has - and legally binding nuclear fuel supply guarantees.
It also covered trade and other benefits, including the possibility of Iran buying civil aircraft from the West.
"We are offering a proposal which we would like to be the starting point for real negotiations," said Solana, describing the world powers' offer as generous and comprehensive.
Tehran argues it has the right under international treaties to master the complete nuclear fuel cycle for civilian purposes - from mining uranium to enriching it. It aims to start test-running its first nuclear power plant at Bushehr this year.
"If the package includes suspension it is not debatable at all," government spokesman Gholamhossein Elham said on Saturday when asked about the incentives offer from major powers.
