"It will be a generous package, a bold package that will contain issues related to nuclear, economic matters and maybe if necessary security matters," Solana told reporters before a meeting of EU foreign ministers due to work on the offer.

He gave no details but said the EU wanted to present it to Iran in the coming weeks simultaneously with the approval of a U.N. resolution calling on Tehran to halt enrichment of uranium or face consequences such as sanctions.

Efforts to agree such a resolution last week stalled in the U.N. Security Council amid opposition from Russia and China.

Iran, the world's fourth-largest oil exporter, insists its nuclear plans are purely to make electricity. It affirmed at the weekend it would reject any demand to stop what it calls peaceful nuclear work.

Solana said such statements misunderstood EU policy.

"We have said over and over again that we have nothing against Iran having nuclear capabilities if they are strictly devoted to the production of energy," he said.

But Iranian demands to be allowed to conduct enrichment for research purposes were still "something that at the moment we (the EU) cannot accept", he said.

The United States made clear on Sunday it had no intention of holding direct talks with Iran on the nuclear issue despite a letter to President George W. Bush last week from Iranian President Mahmoud Ahmadinejad -- the first direct communication between the two countries' leaders for more than two decades.

Germany has called publicly for Washington to engage Iran directly while the two other major EU powers, Britain and France, have not commented publicly on the idea.