The International Atomic Energy Agency says a European initiative aimed at coaxing Iran into signing a nuclear deal could lead to improved relations between Tehran and the West.

The IAEA, the U.N. atomic energy agency, has given Tehran until the end of October to sign a legal agreement that would allow international inspectors greater freedom of movement in Iran.

But Iran has said that in return for signing the agreement, known as an additional protocol, it wants access to western nuclear technology.

If Iran joins the 80 other signatories of the additional protocol, its nuclear facilities would be liable to snap inspections by the IAEA.

Three European powers, Germany, France and Britain, are reportedly meeting the Iranians to discuss the prospect of sharing unspecified technology.

IAEA spokesman Mark Gwozdecky says the agency is in no position to cut any deals, but that there was nothing to stop the Europeans from going ahead.

"We are hopeful that such a settlement might be possible in the future," he said. "It would be a win-win situation in that Iran would get the energy needed. Ultimately, this could open the way to a new chapter in the relationship between Iran and particularly Western Europe." The agency says Tehran has promised within the next few days to give the full picture. A western diplomat, who did not want to be named, said the United States and Europe were of one mind that Iran must tell the whole truth about its nuclear program.

The diplomat said he did not think there could be any concrete promises offered to Iran at this stage. He said there could be future possibilities for Iran if it started to cooperate with the IAEA.

The IAEA board of governors is scheduled to meet at the end of November to decide whether Iran's nuclear program is purely peaceful as claimed by Tehran. Washington believes the Iranian program is aimed at eventually developing nuclear weapons.