Nov. 9 (Bloomberg) -- Turkish and Iranian officials held talks on a proposal from the chief of the United Nations nuclear agency for Iran’s enriched uranium to be sent to Turkey for processing into reactor fuel, an alternative to a plan for Russia to do the work.

The Turkish option, which International Atomic Energy Agency Director-General Mohamed ElBaradei suggested on Nov. 6, was discussed by officials from the two countries today at a meeting of leaders of Islamic nations in Istanbul, Turkish Foreign Minister Ahmet Davutoglu said in an interview. Asked how Turkey views the plan, he said the country “always wants to help” resolve disputes, without elaborating.

ElBaradei, in an interview on the PBS network’s Charlie Rose television show, said Turkey could accept Iran’s low- enriched uranium and ship it back as reactor-grade fuel as a way to ease U.S. and European concern that the Persian Gulf country aims to boost its supply of the material to the level needed for nuclear weapons.

Shiite Muslim-ruled Iran hasn’t accepted an earlier proposal, brokered by ElBaradei, for its uranium to be sent to Russia for further enrichment to reactor-grade fuel. Turkey may be a better option because “Iran has a lot of trust in Turkey,” and the U.S. would also agree because it’s “very comfortable with Turkey,” ElBaradei said in the interview.

‘Good Relations’

Iranian President Mahmoud Ahmadinejad, speaking at a press conference in Istanbul after today’s meeting, declined to say whether he’d held talks with Turkey on the issue. He said Iran “has very good relations with Turkey in all dimensions.”

Ahmadinejad also said that Iran is capable of enriching its own uranium, and that it entered into international talks on enrichment outside the country “for the purpose of setting up a dialogue.”

Ahmadinejad and Iranian Foreign Minister Manouchehr Mottaki are attending the meeting in Istanbul.

The U.S. is willing to give Iran’s government more time to decide whether to accept the idea of shipping its uranium abroad for processing, the U.S. ambassador to the IAEA said today at a briefing in Vienna.

“We want to give some space to Iran to work through this,” Ambassador Glyn Davies said. “It’s a tough issue for them. We’re looking for an early, positive response.”

Research Reactor

The material is needed for a Tehran medical research reactor that Iranian officials have said will run out of fuel within two years.

“It’s an important deal because it has broader implications for how Iran and its neighbors” will “go into the future,” Davies said. The U.S. wants to “put the past behind us, the past of mistrust and missteps and 30 years of miscalculation and find a better way into the future.”

In Washington today, a State Department spokesman, Ian Kelly, said the U.S. hopes Iran will “make the right choice” and accept a proposal that will heighten “our confidence that the Iranians are pursuing what they say they’re pursuing,” a civilian nuclear program.

“It also meets the stated needs of the Iranian people, their humanitarian and medical needs,” Kelly said.

Kelly said the U.S. and international community haven’t set a “formal deadline” by which Iran needs to respond, though he added, “our patience is not infinite.”

In response to the U.S. and European plan for Russia to process Iranian uranium, Iran indicated that it favors purchasing the fuel from abroad instead of sending its own stockpile out of the country.

Majority-Muslim Turkey, a U.S. ally and member of the North Atlantic Treaty Organization, has expanded trade and political ties with Iran under the government of Prime Minister Recep Tayyip Erdogan. During a visit to Iran last month, he said that its nuclear program has “peaceful aims” and that its government was taking a “positive” approach in nuclear negotiations.

To contact the reporter on this story: Ben Holland in Istanbul at bholland1@bloomberg.net.

Last Updated: November 9, 2009 15:21 EST