TEHRAN (AFP) Iran agreed on Monday to ship most of its low enriched uranium abroad in a nuclear fuel swap deal backed by Turkey and Brazil but greeted sceptically by world powers seeking new sanctions against Tehran. The accord, which commits Iran to depositing 1,200 kilograms of low enriched uranium (LEU) in Turkey in return for fuel for a research reactor, was signed by the foreign ministers of Iran , Turkey and Brazil. Even after signing the accord Tehran insisted it will continue enriching uranium, a process which the West fears hides a covert nuclear weapons programme. Iran , already under three sets of UN sanctions for refusing to halt uranium enrichment, touted Mondays deal as a goodwill measure designed to pave the way for a resumption of talks with world powers. Brazilian President Luiz Inacio Lula da Silva, one of the driving forces behind the deal, said in a radio interview: Diplomacy emerged victorious today. It showed that it is possible to build peace and development with dialogue. Turkey said it made the need for further sanctions redundant. But Western diplomats close to the UN nuclear watchdog, which has been probing Irans nuclear programme for years, said the deal did not remove the case for further sanctions over Tehrans refusal to halt enrichment. Iran said that the signing meant the ball was now in the court of Western powers, and President Mahmoud Ahmadinejad called for fresh talks over the Islamic republics nuclear programme. I hope the 5+1 (UN Security Council permanent members plus Germany) enter talks with honesty, respect and fairness and heed the great work started in Tehran, the official IRNA news agency quoted him as saying. But Irans arch-foe Israel - the sole if undeclared nuclear-armed power in the Middle East - quickly accused Tehran of manipulating Turkey and Brazil and seeking to buy time in the long-running nuclear standoff. French Foreign Minister Bernard Kouchner said the International Atomic Energy Agency must be the first body to respond to Irans agreement, while Germany said nothing could replace a deal between Iran and the IAEA. Britain, too, expressed reservations. Mondays signing came after three-way talks in Tehran by Ahmadinejad, Lula and Turkish Prime Minister Recep Tayyip Erdogan. The deal appeared to be a breakthrough in long-stalled discussions over the refuelling of the Tehran research reactor that makes radioisotopes for cancer treatment. The IAEA has been trying to persuade Iran since October to sign a deal with the United States, France and Russia that would see Irans LEU stockpile shipped abroad and then turned into fuel for the Tehran research reactor. But Iran has so far stalled on the deal, insisting it wants to keep the uranium on its own soil for a simultaneous swap with reactor fuel. Uranium enrichment is at the centre of Western suspicions over Tehrans atomic programme, because in a highly purified form, it can be used to make the fissile material of a nuclear bomb. Under the new agreement, a copy of which was obtained by AFP, Tehran is ready to deposit the LEU in Turkey within one month. In return, the United States, France and Russia would deliver 120 kilos of fuel needed for the reactor in no later than one year. A spokeswoman for EU foreign affairs chief Catherine Ashton said while the deal was welcome, it does not solve the fundamental problem which is the international community has serious concerns about (the stated) peaceful intentions of Irans nuclear programme. Turkish Foreign Minister Ahmed Davutoglu said there was no need for further UN sanctions in the light of the deal as Turkey and Brazil have made guarantees and the low enriched uranium will remain in Turkey . Brazil dismissed Israels criticism with an aide to Lula saying that Brazil has helped bring the positions together, as a facilitator for dialogue.