Iran said it was determined to press on with its nuclear programme, snubbing an announcement by the United States that it would offer Tehran incentives to halt sensitive fuel cycle work.

　　The White House abandoned its uncompromising policy on Iran and its feared nuclear programme for the first time in two years yesterday by joining the Europeans in offering to reward Tehran if it halts its most ambitious nuclear project.

　　The US secretary of state, Condoleezza Rice, was expected last night to announce the major policy shift, the most concrete result yet to emerge from President George Bush's recent fence-mending trip to Europe. Britain, France, and Germany have also agreed to yield to US pressure on punitive action against Iran should diplomacy fail to resolve the dispute.

　　The three European countries, who have been seeking to negotiate an agreement with Iran for 18 months, issued a statement yesterday saying they would join the US in taking the issue to the UN security council if no deal was struck.

　　"We are united in our determination that Iran should not acquire a nuclear weapons capability," the EU troika said, echoing remarks that Mr Bush made while in Europe and signalling that there was now a transatlantic consensus on how to tackle the Iranian problem which is crucial to its success.

　　For the past 18 months the Europeans have been offering trade, security, and political concessions to Iran if it agrees to stop its uranium enrichment programmes. The Iranians, who have frozen the programme, insist they will not abandon it entirely.

　　The dispute has been played out in the halls and corridors of the International Atomic Energy Agency in Vienna, where the Iranian row has dominated the quarterly meetings for the past two years.

　　Yesterday's announcements mark a sea change in both European and US policy. The Europeans are now committed to going to the security council if the talks break down. But the Americans are ditching years of hostility, rejection of concessions, and contempt for the Europeans' conciliatory approach.

　　Americans say they will support Iran's aim of joining the World Trade Organisation. The Americans will also no longer block Europe's offer to unlock a frozen EU-Iran trade and economic agreement and the sale of Airbus aircraft to Iran.

　　These, however, are modest concessions, unlikely to get the Iranians to abandon a 20-year-old uranium enrichment project, a process that can create fissile material for warheads.

　　"This is really not an issue of what people should be giving to Iran," Ms Rice said on Thursday in Washington. "This is an issue of keeping the spotlight on Iran."

　　On Thursday, Mani Shankar Aiyar, the Indian oil minister, said Washington was pressing hard for delays on a $4bn (?2.1bn) gas pipeline project with Iran. He said the US ambassador to India, David Mulford, had expressed concerns, but added that India still believed the deal could go ahead.

　　Diplomats do not expect any real movement from the Iranians until after the presidential elections in the autumn.