WASHINGTON (CNN) -- Iran could produce nuclear power using uranium enriched in Russia under a draft proposal aimed at breaking an impasse over Tehran's nuclear program, a Western diplomat familiar with the plan said Thursday.The plan would let Iran produce electricity from nuclear reactors, as Iranian officials say they want to do. But the reactors would use Russian-produced fuel that could not be used to produce nuclear weapons, the diplomat told CNN.U.S. and European officials hope that idea will break a diplomatic impasse over Iran's nuclear program, which the Bush administration says could be used to build an atomic bomb.Under the plan, Iran would continue to operate its uranium conversion plant at Isfahan, which converts raw uranium to uranium hexafluoride. That substance would then be shipped to Russia, where technicians would process it into a form suitable for use in nuclear power plants -- but not nuclear weapons.That process would bypass Iran's uranium-enrichment facility at Natanz, which U.S. officials fear could be used to produce the highly enriched uranium needed to build a nuclear weapon. Iran denies working towards nuclear weapons, saying its goal is to produce civilian energy.The Russians already reprocess spent nuclear fuel from Iran's Bushehr nuclear power plant. Spent fuel rods can be reprocessed into plutonium, another element that can be used to produce nuclear weapons.The Bush administration and the European Union powers of Britain, France and Germany, which have been leading talks with Iran, have agreed to the idea, the diplomat said. But no formal proposal has been laid on the table, the U.S. State Department said Thursday.Iran broke off talks with the three European countries earlier this year, saying the European demand that it stop its nuclear program altogether was unacceptable. On Monday, its foreign ministry said Iran would not give up its right to produce enriched uranium.The United States, which has not had diplomatic relations with Iran since the 1979 revolution that brought its Islamic government to power, has not been involved in the talks directly."It is a process that the EU-3 is in the lead on, and that we believe Iran should return to as soon as possible," State Department spokesman Adam Ereli said.Talks among European, Russian and South African officials were under way at the Vienna headquarters of the International Atomic Energy Agency, the U.N. nuclear watchdog, the diplomat said. The agency's governing board is scheduled to meet on November 26, and Washington and the EU-3 hope to win support for turning up the heat on Tehran -- even threatening it with the prospect of sanctions from the U.N. Security Council if necessary.The diplomat said IAEA Director-General Mohammed ElBaradei was highly interested in placing international controls on the nuclear fuel supply. But IAEA spokeswoman Melissa Fleming said only that ElBaradei, a recent Nobel laureate, hoped a solution to the stalled talks could be found "in the coming days."Sanction threat"Dr. ElBaradei supports the efforts of the countries who are presently engaged in developing such a proposal," Fleming said in a written statement.She said he was encouraging efforts to restart the stalled talks and was ready to visit Iran "at an appropriate time" to help make a deal.But a French diplomat told CNN that Iran would have to halt its conversion of uranium at Isfahan and return to the talks before any concepts would be presented.South Africa, a key non-aligned nation, had offered a similar proposal, the diplomat said. It voluntarily dismantled its nuclear weapons program in the early 1990s under IAEA supervision.The IAEA has called for Iran to be more open and to provide greater inspections so that questions about the intentions of its nuclear program can be laid to rest.ElBaradei said Monday his inspectors had not determined the extent of Iran's nuclear program as quickly as he would like. But he complimented the Iranians for allowing access to facilities beyond the confines of the IAEA's mandate.The United States has threatened to take Iran before the U.N. Security Council for possible sanctions unless it agrees to give up its uranium enrichment program. Iran, meanwhile, has threatened to abandon its voluntary suspension of uranium enrichment if it faces sanctions.State Department correspondent Andrea Koppel contributed to this report.