Foreign ministers of the five permanent UN Security Council members, plus Germany, offered Iran a package of benefits if it suspends sensitive nuclear fuel work after hours of talks in Vienna late Thursday.

But it came conditioned with a threat of penalties, including UN sanctions, if Tehran refuses to suspend uranium enrichment and reprocessing -- the core programmes in making nuclear fuel but what can also be used in atom bombs.

British Foreign Secretary Margaret Beckett gave no details of the package, but said at a late-evening press conference in Vienna that "we are now talking to the Iranians about our proposals."

A US State Department official said Tehran would have only a few weeks to respond to the proposals by the six powers -- Britain, China, France, Germany, Russia and the United States.

There was no immediate reaction from Iran to the deal Friday, which is the main day of rest and prayer in the Muslim world, but the Islamic republic, which insists its work is part of peaceful nuclear energy drive, has previously said it will not halt enrichment.

Hailing what she called the "far-reaching" proposals, Beckett urged Tehran to respond positively to the benefits on offer in order to allay fears that it is seeking weapons and avoid UN Security Council punishment.

"We believe they offer Iran a chance to reach a negotiated agreement," she added, flanked by US Secretary of State Condoleezza Rice.

The agreement by six of the world's most powerful countries caps months of diplomacy during which the United States has tried to meet Russian and Chinese demands to avoid escalating the showdown over Iran's nuclear programme.

"We consider it a step forward in our quest to deny Iran a nuclear weapons capability," US Under Secretary of State for political affairs Nicholas Burns told reporters afterward.

US National Intelligence Director John Negroponte meanwhile said that Iran appeared determined to make nuclear weapons and could develop such an arsenal as early as 2010.

"They seem to be determined to develop nuclear weapons," he told BBC radio in London.

"We don't have a clear-cut knowledge but the estimate we have made is some time between the beginning of the next decade and the middle of the next decade they might be in a position to have a nuclear weapon," the US spy chief said.

The Vienna proposals came after the United States, in a major policy shift 26 years after breaking off diplomatic relations with Tehran, offered to join multi-party talks with Iran if it suspended enrichment.

US officials stressed the package offered had bite, despite some diplomats saying the disincentive side had been watered down.

A draft proposal of the text seen by AFP includes helping Iran build light water reactors for its civilian nuclear energy programme.

According to this text, possible sanctions could include an arms embargo -- something Russia, a key arms supplier to Iran, and China, a major consumer of Iranian oil, resist -- but that sanctions would be targeted rather than a full economic or other boycott.

Beckett said that if Iran complied, the West "would suspend action in the Security Council," where the United States and Europe seek sanctions against Iran.

If not, she warned, "further steps would have to be taken in the Security Council."

Earlier Friday, Russian Foreign Minister Sergei Lavrov voiced Moscow's hope that Iran would respond.

"Together at the negotiating table we will be able to work out a way that would allow us to ensure Iran's legitimate right to peaceful nuclear energy and yet maintain the non-proliferation regime," Lavrov was quoted by ITAR-TASS agency as telling Russian reporters here.

China told Iran that it would support efforts to resolve the issue through diplomacy, during a phone call between their foreign ministers, state media in Beijing reported.

"China supports all efforts conducive to the resolution of the Iran nuclear issue through diplomatic negotiations," Xinhua news agency said, reporting a phone call between China's Li Zhaoxing and Iran's Manouchehr Mottaki.