The agreement came a day before a report was issued to the International Atomic Energy Agency (IAEA) detailing the extent of Iran's co-operation during the last two years of inspections and summarising the issues that remain unresolved. The report cleared Iran of misusing any of the radioactive materials that have been declared, but said it could not yet clear Iran of trying to build a nuclear weapons capability.

If the deal had not been struck, the IAEA board was expected to recommend that Iran be referred to the UN Security Council for further action, possibly leading to sanctions. Although permanent council members China and Russia are believed to oppose the use of an embargo to force an end to the enrichment programme, they were not expected to use their vetoes against a UN resolution.

The most significant shift Iran made in the agreement was to accept that the manufacture of uranium hexafluoride gas and centrifuge parts constituted activities related to uranium enrichment, which were to be suspended from 21 November pending a long-term agreement. The IAEA has also agreed to end its three-month scheduled reports and to report only when deemed necessary.

However, Iran refuses to accept indefinitely European demands that it stop exercising its legal right to an enrichment programme. European countries and the US say the uranium enrichment and heavy water facilities can easily produce weapons-grade radioactive material and have offered to guarantee a supply of monitored fuel for Iran's nuclear reactors. Under the terms of the nuclear non-proliferation treaty (NPT), Iran is entitled to enrich uranium and once it does so, it will become eligible for greater technological assistance from other signatories of the NPT.

The IAEA report said it was still concerned about facilities at Lavasan, Kolahdouz and Pachin, near Tehran, and was investigating the origin of enriched uranium discovered in the country and the age of some plutonium discovered in Iran. The body has also criticised Tehran for not being entirely candid in the past - most notably for keeping its enrichment programme secret for 18 years.