TEHRAN: Iran has made a proposal to Moscow to jointly produce nuclear fuel for its Russian-built Bushehr plant and future facilities, the head of Iran`s Atomic Energy Organisation was quoted as saying Thursday.

"We have made a proposal to Russia for the creation of a consortium, licensed by that country, to do part of the work in Russia and part of it in Iran," state news agency IRNA quoted Ali Akbar Salehi as saying.

"Moscow is studying this offer," he said. "We (Iran) should show the world our capability in uranium production and transforming it to nuclear fuel."

Iran is under four sets of UN Security Council sanctions for its refusal to halt uranium enrichment -- the process which can be used to make nuclear fuel but also the fissile core of an atom bomb in highly purified forms.

Iran claims it is capable of making nuclear fuel as it continues to enrich uranium to 20 percent for a research reactor.

Last week Russia started fuelling Iran`s first and long-delayed nuclear power plant near Bushehr in southern Iran. Russia has pledged to supply the plant with fuel for 10 years.

However as a permanent UN Security Council member, Russia also backed the latest sanctions in June against the Islamic republic, which is accused by world powers of seeking atomic weapons under the guise of a civilian programme. Tehran vehemently denies this.

BDST: 1230 HRS, August 26, 2010