The West wants Iran to suspend uranium enrichment but a senior Iranian atomic official says that would not solve the nuclear standoff.
Mohammad Saeedi of Iran's Atomic Energy Organisation has suggested France could instead invest in Iran's nuclear industry.
The deputy head of the agency has proposed France could then supervise Tehran's work.
A French Foreign Ministry spokesman said there were no direct talks on the proposal.
Past proposals for foreign investment have received little interest.
The US, Russia, China, France, Britain and Germany have offered Iran economic and political incentives to halt enrichment.
Iran has hinted at some flexibility over suspension but not as a precondition for talks.
The West has opposed plans that would allow Iran to continue its nuclear program and enable it to master nuclear technology.
Iran maintains its nuclear ambitions are peaceful so that it can generate electricity.
No progress in EU talks
The European Union said the latest talks had been helpful but had brought no breakthrough.
On Tuesday, EU foreign policy chief Javier Solana has had a telephone conversation with Iran's nuclear negotiator Ali Larijani.
He described it as constructive but said it had not broken the impasse.
"We still have some elements that need to be agreed. We will
continue talking," Mr Solana said.
He also described the proposal for France to monitor Iran’s nuclear program as interesting but needed more analysis.
US warning
US Secretary of State Condoleezza Rice said in Saudi Arabia
there was no evidence Iran would halt enrichment.
"Should it not, then the only choice for the international community is to live up to the terms of resolution 1696 ... and that means to bring sanctions," she said.
A senior British official, who declined to be named, said world
powers were preparing to draft UN sanctions against Iran.
He stressed Mr Solana had reported back that Iran gave a clear "No" to suspension.
"We are intensifying preparatory efforts for what should be in a
resolution," the official said.
Iran failed to suspend enrichment by an August 31 deadline set
by the UN Security Council.
But US calls for swift moves towards sanctions have met resistance from some European states, keen for more talks, and opposition from Russia and China.
The secretary of Russia's Security Council, Igor Ivanov, said
negotiations should resolve the stand-off.
"Russia believes that all the issues regarding Iran's nuclear case should be resolved through talks and is ready to give efforts to reach that point," he said after meeting Mr Larijani in Tehran.