A technician works at the Isfahan uranium conversion facility 440 kilometres south of Tehran in April. (Caren Firouz/Reuters)

Iran has submitted its response to the framework of a UN-drafted nuclear deal, which is aimed at easing Western worries about Tehran's ability to produce a nuclear warhead.

The International Atomic Energy Agency confirmed Thursday that it has received Iran's initial response to the draft deal.

An unnamed Western diplomat who spoke to The Associated Press said Iran is objecting to the deal, saying it wants to process the uranium at home under the supervision of the IAEA.

The draft deal was hammered out by IAEA chief Mohamed ElBaradei in followup talks to an Oct. 1 meeting between Iran and six world powers in Geneva, where Iran agreed to open the disputed enrichment site to UN inspections.

"[ElBaradei] is engaged in consultations with the government of Iran as well as all relevant parties, with the hope that agreement on his proposal can be reached soon," the IAEA said in a release.

Tehran seeking changes to deal

The IAEA-brokered plan is seen as crucial to start defusing a standoff between Iran and world powers over its contested nuclear ambitions.

Under the plan, Iran is required to send 1,100 kilograms of low-enriched uranium (around 70 per cent of its stockpile) to Russia in one batch by the end of the year. After further enrichment in Russia, France would convert the uranium into fuel rods that would be returned to Iran for use in an aging reactor in Tehran designed for medical research, he said.

Key to the deal is that the fuel would be suitable for a research reactor but not for nuclear weapons.

In a speech on Thursday, Iranian President Mahmoud Ahmadinejad hinted Tehran is seeking changes to the deal, including shipping abroard its low-enriched uranium in stages rather than all at once.

Iranian newspaper Javan reported that Tehran wants a "simultaneous exchange," receiving higher enriched uranium to run a Tehran research reactor at the same time as it ships its low-enriched uranium abroad for conversion into fuel for the same purpose.

Iran is co-operating with the West, Ahmadinejad told a rally, but it "will not retreat even an iota" over the nation's right to pursue a nuclear program — which the West fears masks a nuclear arms ambition.

The Iranian government has insisted that its nuclear program is for peaceful purposes.

"Ground has been paved for nuclear co-operation" and Tehran is ready to now work on nuclear fuel supplies and technical know-how with the UN nuclear watchdog, Ahmadinejad added.

UN inspects site

Also Thursday, a team of UN nuclear inspectors returned to the agency's headquarters in Vienna from a visit to a previously secret Iranian uranium enrichment site. It expressed satisfaction with the mission but details have not been revealed.

What the inspectors saw — and how freely they were allowed to work — will be key in deciding whether six world powers engaging Iran in efforts to reduce fears that it seeks to make nuclear weapons seek a new round of talks with Tehran.

The Fordo enrichment site is near the holy city of Qom. Iran revealed it was building it Sept. 21 in a confidential letter to the International Atomic Energy Agency. Just days later, the leaders of the U.S., Britain and France condemned Tehran for having kept it secret.

The West believes Iran revealed the site's existence only because it had learned that the U.S. and its allies were about to make it public. Iran denies that.

With files from The Associated Press