Diplomats say world powers are prepared to offer Iran a package of economic incentives that would guarantee its right to develop nuclear energy if it stops enriching uranium.

Representatives from the five permanent U.N. Security Council members - U.S., France, Britain, China, Russia and Germany are expected to meet in Vienna on Thursday for more talks on the incentives package.

The group is also considering punitive measures in case incentives fail. China and Russia oppose sanctions and the use of force.

Meanwhile, Iran says it is carrying out research into nuclear fusion in the latest revelation about its controversial nuclear program. Officials say fusion research started several years ago. Scientists around the world have so far been unable to generate energy from fusion, but the process is incorporated in some nuclear weapons.

The U.S. and Europe believe Iran is secretly developing nuclear weapons. Iran says its nuclear program is only for peaceful purposes.

Some information for this report was provided by AFP and AP.