Senior U.S. officials say the Bush administration is ready to adopt a European proposal to offer Iran economic incentives to abandon its aggressive nuclear program.

The agreement, which has been widely anticipated since President Bush returned from Europe late last month, is expected to be formally announced later, Friday.

Under the proposal, the United States would allow Iran to join the World Trade Organization and buy aircraft spare parts. In return, Britain, France and Germany will agree to refer Iran to the U.N. Security Council if Tehran fails to give up its suspected nuclear weapons program.

Washington's decision to embrace economic incentives is seen as a significant reversal from its refusal to reward Iran for what the United States regards as bad behavior.

Washington accuses Tehran trying to build nuclear weapons. Iran says its nuclear program is only for generating electricity.

Some information for this report provided by Reuters.