"The Iranians want to get enriched uranium fuel for their reactor first before they send it abroad, which simply isn't acceptable," one diplomat told Reuters.

Another diplomat confirmed the remarks as accurate.

In an initial response to an nuclear fuel proposal drafted by International Atomic Energy Agency, Western diplomats said on condition of anonymity that major Western powers found the Iranian demand for immediate access to fresh atomic fuel unacceptable.

Tehran insists its nuclear program is peaceful and has refused to halt it, while Western powers fear Iran is covertly developing atomic weapons.

Reuters