As envisaged by the Internationa Crisis Group this option would comprise the following broad elements.

1.  Iran, the EU and Russia, with U.S. support, to agree on a proposal under which Iran would indefinitely suspend domestic enrichment activity, verified by a highly intrusive inspections regime, in exchange for an internationally guaranteed fuel supply, access to advanced nuclear technology, U.S.-backed security assurances, and a gradual lifting of sanctions by and resumption of normal diplomatic relations with the U.S.

2.  The U.S., in the context of Iran’s agreement to this proposal and subject to its compliance, to:

• commit not to threaten or use force against Iran;

• refrain from interfering with Iran’s importation of nuclear technologies and materials for civilian purposes, as permitted under the NPT;

• support, where needed, EU economic incentives, in particular by backing Iran’s WTO accession; and

• recognising Iran’s regional role, engage in discussions with Tehran on Iraq’s reconstruction and political future.

3.  The U.S., if Iran agrees to take parallel steps on issues of concern to Washington (including support for militant groups), to:

• unfreeze Iran’s assets in the U.S.;

• lift sanctions;

• and resume normal diplomatic relations.

4.  The EU to inform Iran about its readiness to recognise Iran’s right to acquire full fuel cycle capability under Article IV of the NPT if it suspends all enrichment activities, resumes application of the Additional Protocol and negotiates the phased implementation of enrichment capability on a basis acceptable to the wider international community.

5.  Iran and the EU, with the support of the U.S., Russia and China, to agree on a three-phase “delayed limited enrichment” plan with the following elements:

(a)  Phase 1 (2-3 years): i.  the IAEA continues its assessment under the Comprehensive Safeguards Agreement and Additional Protocol until it can conclude that all declared nuclear activity is for peaceful purposes; ii.  Iran suspends all enrichment activities on its territory; freezes the manufacture and testing of all centrifuges, which are to be mothballed and placed under IAEA seal; allows continuous and intrusive IAEA inspections; ratifies the Additional Protocol; and also suspends construction of heavy water facilities and plutonium-separation activities; and iii.  the EU recognises Iran’s right to enrich uranium, begins cooperation on a range of non-military commercial issues, concludes a trade and cooperation agreement, encourages investment in Iran’s natural gas sector, and allows European suppliers to participate in the construction and/or procurement of Iranian nuclear power plants.

(b)  Phase 2 (3-4 years): i.  the IAEA continues its work under the Safeguards Agreement and Additional Protocol until it concludes that there are no undeclared materials and activities; ii.  Iran carries out limited, closely monitored, low-enrichment activites on its soil with at most several hundred first generation centrifuges, enriching at no more than 5 per cent, sufficient for research and development; enriched uranium is either stored outside the country or immediately converted into fuel rods; and all unused centrifuges to be mothballed and sealed by the IAEA; and iii.  the EU expands its economic cooperation.

(c)  Phase 3 (indefinitely thereafter): i.  the IAEA inspection regime reverts to that specified by the Safeguards Agreement and the Additional Protocol, and there is overall normalisation of the relationship between the parties; ii.  fuel cycle facilities on an industrial scale, in particular for uranium enrichment, are desirably undertaken on the basis of multilateral co-ownership; and iii.  Iran foregoes indefinitely spent fuel reprocessing (the chemical separation of plutonium) and the establishment of heavy water infrastructure.

6.  The U.S., in the context of Iran’s agreement to this proposal and subject to its compliance, to agree on the implementation, on a phased basis and in a sequence to be negotiated, of the incentives listed in Recommendations 2 and 3 above.

7.  Russia to agree, in the context of Iran’s agreement to this proposal, to:

• ensure expeditious return by Iran of all spent Russian-supplied fuel from Bushehr;

• during Phase 1, store nuclear materials from the Isfahan conversion plant; and

• during Phase 2, store low-enriched uranium from the pilot centrifuge facilities or convert it into fuel rods.

8.  The EU, Russia and China to agree that, in the event of Iranian rejection of or non-compliance with this proposal, they will support action by the UNSC and establishment of an escalating sanctions regime, including:

• a ban on the sale or transfer of all nuclear and missile technology, dual-use technology, and conventional weapons;

• a moratorium on new economic agreements and a ban on new investment in Iran’s oil and gas industry and infrastructure;

• restrictions on the importation by Iran of refined oil products and of non-oil or gas products; and

• imposition of land, air and sea interdiction regimes to prevent Iranian import of nuclear or dual use technologies.