TEHRAN - Iran agreed on Monday to ship much of its low enriched uranium abroad in a nuclear fuel swap deal backed by Turkey and Brazil but greeted sceptically by world powers seeking new sanctions against Tehran.

The accord, which commits Iran to depositing 1,200 kilograms (2,640 pounds) of low enriched uranium (LEU) in Turkey in return for fuel for a research reactor, was signed by the foreign ministers of Iran, Turkey and Brazil.

Iran, already under three sets of UN sanctions over its defiant nuclear drive, touted the agreement as a goodwill gesture that paves the way for a resumption of talks with world powers.

Brazilian President Luiz Inacio Lula da Silva, a driving force behind the deal, said: "Diplomacy emerged victorious today. It showed that it is possible to build peace and development with dialogue."

Turkey said it made the need for further sanctions redundant.

The White House said however that the United States and its allies still had major reservations about the deal, although it did not categorically reject the agreement.

"Given Iran’s repeated failure to live up to its own commitments, and the need to address fundamental issues related to Iran’s nuclear programme, the United States and international community continue to have serious concerns," President Barack Obama's spokesman Robert Gibbs said.

He said it would be a "positive step" for Iran to transfer LEU off its soil, but noted that Tehran had said it would continue producing higher grade material.

EU foreign affairs chief Catherine Ashton said the accord only "partly" responds to the demands of the International Atomic Energy Agency (IAEA), which has been probing Iran's nuclear programme for years.

Russian President Dmitry Medvedev had previously welcomed the agreement but said further talks were needed.

"What was done by our colleagues needs to be welcomed. This is the politics of a diplomatic solution," he said. "We need to have consultations with all the parties, including Iran, and then determine what to do next."

Iran had said the signing meant the ball was now in the court of Western powers, and President Mahmoud Ahmadinejad called for fresh talks over the Islamic republic's nuclear programme.

"I hope the 5+1 (UN Security Council permanent members plus Germany) enter talks with honesty, respect and fairness and heed the great work started in Tehran," the official IRNA news agency quoted him as saying.

But Iran's arch-foe Israel -- the sole if undeclared nuclear-armed power in the Middle East -- was quick to accuse Tehran of manipulating Turkey and Brazil and seeking to buy time in the long-running nuclear standoff.

Britain also expressed reservations. "Iran's actions remain a serious cause for concern," junior foreign minister Alistair Burt said.

Germany said nothing could replace a deal the IAEA offered to Tehran in October that envisages Iran's 3.5 percent LEU being sent to Russia and France for enrichment to 20 percent and then returned as fuel for the Tehran reactor.

Within the region, however, Egypt's Foreign Minister Ahmed Abul Gheit told reporters that the accord was "a positive step forward" which Cairo hoped would "lead to a solution to the crisis between Iran and the West."

Monday's signing came after three-way talks in Tehran by Ahmadinejad, Lula and Turkish Prime Minister Recep Tayyip Erdogan.

The deal appeared to be a breakthrough in long-stalled discussions over the refuelling of the Tehran research reactor that makes radioisotopes for cancer treatment.

Iran has so far stalled on the deal the IAEA has been trying to persuade it to sign since October, insisting it wants to keep the uranium on its own soil for a simultaneous swap with reactor fuel.

Enriched uranium is at the centre of Western suspicions over Tehran's atomic programme, because in a highly purified form it can be used to make the fissile material of a nuclear bomb.

Under the new agreement, a copy of which was obtained by AFP, Tehran is ready to deposit more than half of its LEU in Turkey "within one month."

In return, the United States, France and Russia would deliver 120 kilos of fuel needed for the reactor "in no later than one year."

An Israeli official told AFP the fuel swap accord would "radically complicate" international efforts to rein in Iran's nuclear programme through sanctions due to the involvement of rising powers such as Brazil and Turkey.

But Turkish Foreign Minister Ahmed Davutoglu said there was "no need" for further UN sanctions in the light of the deal as his country and Brazil "have made guarantees and the low enriched uranium will remain in Turkey."

Tehran sparked international concerns in February by stepping up its enrichment level to 20 percent to make fuel for the research reactor. At the time, the UN watchdog calculated that Iran had stockpiled 2,065 kilos of LEU.

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