A report in the New York Times says the Obama administration is considering granting Iran phased access to billions of dollars of its frozen funds - if the regime takes specific steps to curb its nuclear program.
The idea would see Iran gain installments on frozen overseas assets in return for measures it takes during negotiations that prove it has no desire to develop a nuclear weapon.
News of the proposal comes after two days of nuclear talks with Iran in Geneva, which saw Iran present what it described as a breakthrough proposal that would include snap inspections of its atomic sites, something the West had said was essential to striking any deal.
Iran's presentation was described by the White House as "useful," with Spokesman Jay Carney saying it showed a "level of seriousness and substance that we have not seen before." The talks also led to the first direct talks between the US and Iran in decades.
The New York Times suggested that giving phased access to funds gave President Obama the "flexibility" to respond to offers made by the Iranians "without unraveling" the crippling sanctions regime that has been built up in recent years.
The report, however, also suggested Iran may not accept the phased approach to removing sanctions due to the dire economic situation the country is in. The report said sanctions have badly damaged the Iranian currency, halved oil exports, and led to high levels of inflation and unemployment – and that Iran is seeking immediate relief.
The US is apparently keen to hold off further punishing sanctions until the full extent of the Iranian proposals are clear. A bill that would see Iran's oil exports reduced even further has yet to be put to a vote.
A senior Israeli official in Prime Minister Binyamin Netanyahu’s office on Wednesday said "Iran should be tested by its actions, not its proposals," and that "until substantive steps are carried out that prove that Iran is dismantling its military nuclear program, the international community must continue with its sanctions against it (Iran)."