"We're still interested in pursuing that offer if Iran is interested," State Department spokesman Philip Crowley said, even as Washington consults with its international partners about imposing tougher sanctions against Iran.

Crowley was referring to an October 2009 UN-drafted deal to supply nuclear fuel for a Tehran research reactor by shipping out Iran's low-enriched uranium in return for higher-grade nuclear fuel produced by Russia and France.

The two groups have been at loggerheads for months as Iran insists it will only be open to a simultaneous exchange to take place inside the Islamic republic, a condition rejected by the world powers.

But Crowley told reporters that "we're still interested in taking that step," the fuel swap offer from the UN International Atomic Energy Agency (IAEA).

"At the heart of this was the proposal that Iran would ship out significant amounts of enriched fuel and there would be an exchange for a corresponding amount of fuel suitable for" the Tehran medical research reaction," he said.

"Iran has never agreed to that element of the offer," he recalled.

However, he said the deal would "need to be updated" as Iran has been operating centrifuges that enrich uranium in the seven months since the offer was first made.

In Tehran, Iranian Foreign Minister Manouchehr Mottaki said Iran plans to hold talks with all 15 members of the UN Security Council in an effort to break the deadlock over the nuclear fuel deal.

Mottaki said the deal could be finalized in "two weeks" if all sides showed the necessary will.

He said the Iranians would have "direct talks" with 14 council members and "indirect talks" with the remaining one, referring to Washington, which does not have diplomatic ties with Tehran.

"The talks will focus on the fuel exchange. They will be conducted by Iran's missions in those countries," Mottaki said.

Washington is leading global efforts to impose a fourth set of UN sanctions against Iran amid the deadlock, in a bid to halt Tehran's nuclear program which it suspects masks a weapons drive, a charge denied by Iran.

While the United States, Britain, France and even Russia have shown readiness for new sanctions, China -- the remaining veto-wielding Security Council member -- has been more reluctant to consider such a proposal.

Russian President Dmitry Medvedev said in an interview aired last week that while he agreed sanctions were needed to halt Iran's nuclear drive, they should not crack down on its oil trade.

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