Iranian Foreign Minister Manouchehr Mottaki said on Saturday that Iran was studying a proposal of incentives and penalties agreed by six world powers in a bid to solve the standoff over Iran's disputed nuclear issue and may make its own package in response.

"We have started studying the proposal and afterwards we will make an official reply to the Europeans," Mottaki was quoted by the official IRNA news agency as saying after talks with visiting Palestinian Foreign Minister Mahmoud al-Zahar.

"We hope that shuttle diplomacy will help lead to a package of proposals by the Islamic republic, which may be in the form of amendments or counter-proposals and can be studied carefully by the Europeans," he said.

European Union foreign policy chief Javier Solana on Tuesday presented to Iran the proposal over Iran's nuclear issue, which had been agreed by the five permanent members of the UN Security Council plus Germany in a meeting in Vienna.

The proposal includes both incentives aimed at persuading Iran to suspend uranium enrichment and possible sanctions if Iran chooses not to comply.

Iran's top nuclear negotiator Ali Larijani has expressed cautious optimism over the new package after his meeting with Solana, saying "there were positive steps but also ambiguities."

Larijani has promised to give a formal response after "a carefully study" of the proposal.

The United States has accused Iran of secretly developing nuclear weapons under a civilian front, a charge categorically denied by Tehran.

Source: Xinhua