Brazil said it feared industrial espionage

The International Atomic Energy Agency said it would send experts to Brazil in October to look at possible solutions.

The IAEA wants to check Brazil is not breaking international agreements on the spread of a chemical, which can be used to make nuclear bombs.

Brazil has opposed the check, saying it must protect its nuclear technology.

Monitoring cameras

"We've made some progress but... we remain in discussions with Brazilian authorities on this issue," IAEA spokesman Mark Gwozdecky told correspondents.

"You can interpret that how you like, but we remain in discussions and... a team of experts will be arriving on 18 October in Brazil to look at possible verification approaches."

Brazil had said earlier on Thursday the two sides agreed the IAEA would inspect pipes at the plant, without looking at the machines themselves.

But a Western diplomat close to the negotiations said the IAEA would probably request that monitoring cameras be put in place.

US diplomats had said Brazil's refusal to allow inspections would send a bad signal at a time of concern about the nuclear programmes of Iran and North Korea.

The plant in question is new and located in the town of Resende.