The Obama administration had hoped the provision would buy time to negotiate an overall agreement with Iran on its nuclear program, The New York Times said. Sending three-quarters of its uranium for processing elsewhere would have left Iran without enough to make a nuclear weapon.
European diplomats and U.S. officials provide information on Iran's response, the Times said.
The provision was part of a draft agreement negotiated with Iran in talks involving the United States, France, Russia and the International Atomic Energy Agency. Iranian representatives apparently agreed to it.
Earlier Thursday, President Mahmoud Ahmadinejad said Western countries had changed their posture from "confrontation to cooperation" because of Iran's "resistance against enemies," the Los Angeles Times reported.
Iran's envoy to the IAEA arrived in Vienna Wednesday to submit Tehran's formal response to the proposal. Iran said this week it would respond to the plan by Friday, about a week later than the U.N. nuclear watchdog had requested.
"In the past they said that we had to halt our nuclear activities," Ahmadinejad said in Mashhad in remarks carried by state-run television. "But today they say, 'Come consult about finding solutions for world problems,' and they want to cooperate for the exchange of fuel and development of nuclear technology and establishing a nuclear plant."