Iran announced last night that it was freezing all operations connected with uranium enrichment in a diplomatic victory for the European Union and a move that should spare Tehran being sent to the UN security council.
In a letter to the UN nuclear watchdog, the International Atomic Energy Agency, the Iranian authorities said they would suspend all activities connected with uranium enrichment until a final and broader diplomatic agreement is reached with the EU.
The Iranian announcement followed 10 days of brinkmanship after marathon negotiations in Paris between Iran and the EU troika of Britain, France and Germany.
The decision was timed to influence a crucial IAEA board meeting in Vienna in 10 days' time. In return for the Iranian agreement, the Europeans are expected to resist US calls that Iran be referred to the security council for possible sanctions.
The agreement gives the Europeans and the Iranians more time to reach a grander bargain. But the Bush administration, in particular, remains intensely suspicious of the agreement.
The White House reacted cautiously to Iran's announcement, saying: "We look forward to a briefing by our European friends."
Since the tentative agreement in Paris, Tehran has balked at the EU's insistence on "indefinite" suspension of uranium enrichment, while the Europeans demanded an indefinite freeze until a long-term agreement was reached.
The Iranians yielded on this point and on the contentious issue of what uranium enrichment means. The Iranian enrichment programme can deliver the fissile material needed for nuclear warheads. The Iranians wanted to continue some operations connected with enrichment, but last night they appeared to have backed down.
The Iranian nuclear issue was threatening to come to a head at the Vienna meeting, with the Iranians facing censure.
If the Iranians had not frozen their uranium enrichment activities by November 25, the EU troika would have backed Washington in seeking to take the crisis to the security council in New York, a move that could have entailed sanctions.
A similar agreement was reached a year ago in Tehran between the EU three and Iran. It was hailed as proof that the EU could display diplomatic muscle, but the deal quickly unravelled.
As a result of last night's agreement, the EU and Iran are scheduled to start negotiations next month on a broader pact trading EU economic and technological support to Iran if Tehran closes down its uranium enrichment facilities entirely.
Observers in Vienna, however, expect a strengthened and impatient Bush administration to get tougher on Iran and be less happy with European attempts to finesse a settlement to avoid a full-blown crisis.