A published report says the Bush administration is holding talks with three European countries on possible economic incentives for Iran to stop its uranium enrichment activities, suspected to be part of a secret nuclear weapons program.

The New York Times quotes unnamed European and American diplomats as saying Washington has not endorsed any incentive plan, but it is not discouraging Britain, France and Germany from coming up with a deal that could be presented to Iran next month.

The diplomats are also quoted as saying discussions include specifics of possible sanctions if Iran turns down an incentive package.

The Bush administration has been demanding penalties against Iran, which faces a Nov. 25 U.N. deadline to cease uranium enrichment activities.