Russia and China have been a key impediment to efforts by the United States to rally members of the UN Security Council behind its plan to slap international sanctions on Tehran in order to force it to halt uranium enrichment.

The issue is expected to be front and centre in negotiations between President George W. Bush and his Russian counterpart, Vladimir Putin, at a Group of Eight summit in St. Petersburg next weekend.

Although details of the proposed deal have not been released, it is seen as an attempt by the Bush administration to soften Russia's recalcitrance ahead of the Bush-Putin talks and bring Moscow firmly into the US camp.

"We are initiating negotiations on a peaceful nuclear cooperation agreement with Russia," White House spokesman Peter Watkins told AFP on Saturday. "Such an agreement would benefit both the United States and Russia and indeed the world by enabling advances in greater use of nuclear energy."

He did not say when the talks would formally begin, but another official speaking on condition of anonymity said a formal announcement could be expected at the G8 summit.

The White House official, however, was adamant in linking the deal to Russia's approach to Iran and its readiness to cooperate with the Bush administration in halting what it sees as Iran's secret nuclear weapons programme.