Iran and six world powers have “virtually solved” a dispute over the Arak heavy-water reactor, which the West is worried could produce bomb-grade material, the Islamic Republic’s nuclear chief was quoted as saying on Saturday.

Ali Akbar Salehi, head of the Atomic Energy Organization of Iran, said the P5+1 powers had agreed to a proposal presented by Iran to alter the course of production at the plant, AFP reported.

“Iran has made a proposal to the P5+1 to make certain changes in Arak and they have accepted. This question is virtually resolved,” Salehi told the Arabic-language Al-Alam television channel.

The fate of the heavy-water plant, which has not yet been completed, is one of the central issues in negotiations between Iran and the world powers, aimed at reaching a long-term deal on Tehran’s nuclear program by a July 20 deadline.

Iran and the United States, France, Germany, Britain, Russia and China ended their last round of negotiation in Vienna on Wednesday and said they would start drafting an agreement at their next meeting there on May 13. But officials said significant gaps needed to be bridged.

Following the latest round of talks, Salehi announced that Iran had made the proposal that would significantly lower highly radioactive plutonium production at the Arak research reactor, signaling flexibility on a key issue in talks to end the nuclear dispute.

The comment was the latest sign that a compromise may be possible over the reactor, which the West fears could yield weapons-usable plutonium.

The website of Iran’s English-language state television Press TV, citing Salehi late on Wednesday, said Iran had offered a “scientific and logical proposal to clear up any ambiguities” over the Arak reactor.

“In our plan, we explained that we would redesign the heart of the Arak reactor, so that its production of plutonium will decrease drastically,” Salehi said.

The Islamic Republic has said that the 40-megawatt reactor is intended to produce isotopes for cancer and other medical treatments. It agreed to halt installation work at Arak under a six-month interim accord struck on November 24, which was designed to buy time for negotiations on a comprehensive deal.

Russia’s chief negotiator suggested after the April 8-9 talks that progress had been achieved on Arak. “The possibility of a compromise on this issue has grown,” the Russian Interfax news agency quoted Deputy Foreign Minister Sergei Ryabkov as saying.

Heavy-water reactors such as Arak, fueled by natural uranium, are seen as especially suitable for yielding plutonium.

To do so, however, a spent fuel preprocessing plant would be needed to extract it. Iran is not known to have any such plant.

If operating optimally, Arak – located about 250 km. southwest of Tehran – could produce about 9 kg. of plutonium annually, the US Institute for Science and International Security says.

Any deal must lower that amount, Western experts say.

A week ago, Princeton University experts said that annual plutonium production could be cut to less than a kilogram – well below the roughly 8 kg. needed for an atomic bomb – if Iran altered the way Arak is fueled and lowered its power capacity.

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