The agreement was signed in the Iranian capital between the foreign ministers of Iran, Turkey and Brazil after three-way talks by Iranian President Mahmoud Ahmadinejad, Brazilian President Luiz Inacio Lula da Silva and Turkish Prime Minister Recep Tayyip Erdogan.
Under the agreement "Turkey will be the place to keep Iran's 3.5 per cent (low enriched) uranium," foreign ministry spokesman Ramin Mehmanparast told reporters. "One thousand two hundred kilos (of LEU) will be exchanged."
He added that Iran will officially notify the International Atomic Energy Agency (IAEA) of the agreement "within a week."
"The IAEA should inform the Vienna group (United States, France and Russia) of this proposal," he said of world powers which have wanted Iran since last October to accept a UN-backed deal to ship its enriched uranium abroad.
Israel, which along with many Western powers suspects Iran is using its nuclear enrichment programme to mask a drive for atomic weapons, immediately accused Teheran of "manipulating" Turkey and Brazil over the deal.
"The Iranians have manipulated Turkey and Brazil in appearing to accept the enrichment of part of their uranium on Turkish soil," a senior Israeli official in Jerusalem said.
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There was no immediate reaction from the IAEA, which had in its proposal suggested Iran send its uranium stockpile to Russia to be further enriched and then on to France to make nuclear fuel for a research reactor in Teheran.
Iran had stalled, insisting it wants to keep the LEU on its own soil for a simultaneous swap with reactor fuel.
Following news of the deal, Iranian President Mahmoud Ahmadinejad called for fresh talks with major powers over the country's disputed nuclear programme.
"Following the signing of the nuclear fuel swap deal, it is time for 5+1 countries to enter talks with Iran based on honesty, justice and mutual respect," he said.