The European Union foreign policy chief arrived in Tehran late Monday, carrying a Western incentives package designed to coax Iran to stop its uranium enrichment program.

Javier Solana told reporters at Tehran airport that the West wanted "to start a new relationship on the basis of mutual respect and trust."

CountryWatch: Iran

He was to meet Tuesday with Iranian Foreign Minister Manouchehr Mottaki and chief nuclear negotiator Ali Larijani.

Mottaki, who returned from Oman shortly before Solana arrived, said the EU and Iran would launch what he termed "shuttle diplomacy" in an effort to overcome differences about Tehran's disputed nuclear program.

He did not elaborate.

Solana said he believed the package of incentives and threatened punishments would "allow us to engage in negotiations based on trust, respect and confidence."

The six-nation package offers economic and political incentives if Tehran relinquishes domestic enrichment, which is used to generate power but can also produce weapons-grade uranium for nuclear warheads.

The offer agreed on in Vienna on Friday by the U.S., Russia, France, Britain and China — the five permanent U.N. Security Council nations — plus Germany, also contains the implicit threat of U.N. sanctions if Iran remains defiant.

In a breakthrough last week, the United States agreed to join in multination talks on the package if Tehran suspends enrichment.

Details of the basket of perks and penalties have not been made public. But an earlier draft shared in part with The Associated Press offered help in building nuclear reactors that produce reduced amounts of waste that could be reprocessed for nuclear arms and a guaranteed supply of fuel as well as an offer to supply European Airbus aircraft for Tehran's civilian fleet.

Diplomats revealed Monday that Washington has sweetened the offer originally drawn up by France, Britain and Germany by saying it will lift some bilateral sanctions on Tehran such as a ban on Boeing passenger aircraft and related parts if Iran agrees to an enrichment freeze.

One of the diplomats also said in the package agreed on Friday, Washington would be prepared to take some "dual-use" technology off its banned list of exports to Iran. The term is used for products and material that have military as well as civilian uses. The diplomat declined to go into details.

Iranian officials have sent conflicting signals on the initiative, reflecting a possible struggle within the leadership on how to react. Additionally, the U.S. offer to join in direct talks with Iran might have taken Tehran's top officials off guard.

Iranian President Mahmoud Ahmadinejad, normally a hardline critic of the United States who insists that Tehran has a right to enrichment, said on the weekend that a breakthrough in negotiations was possible and welcomed the U.S. offer to join talks, while rejecting preconditions.

But threats by Iran's supreme leader, Ayatollah Ali Khamenei to disrupt the world's oil supply if Tehran is punished over its nuclear program reflected Tehran's nervousness.

Khamenei on the weekend said the United States and its allies would be unable to secure oil shipments passing out of the Gulf through the strategic Strait of Hormuz to the Indian Ocean.

Although other Iranian officials have repeatedly ruled out using oil as weapon, his comments propelled oil prices to US$73 a barrel Monday.

Iran is the world's fourth-largest oil exporter and the second-largest producer in the Organization of Petroleum Exporting Countries.

In Washington, White House spokesman Tony Snow urged reporters to withhold judgment on Khamenei's remarks until Iran has had a chance to weigh the package.

"Let people look at it," he said. "I understand why commodities markets may be unsettled by a comment like that, but over time, if this succeeds, the commodities markets are going to be very happy and so should we all be."