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TEHRAN, Iran (AP) Iran will redesign its Arak heavy water reactor to greatly limit the amount of plutonium it can make, the country's vice president said Saturday, marking a major concession from the Islamic Republic in negotiations with world powers over its contested nuclear program.

The comments by Vice President Ali Akbar Salehi come as the talks face an informal July 20 deadline to hammer out a final deal to limit Iran's ability to build nuclear arms in exchange for ending the crippling economic sanctions it faces.

Iranian state television quoted Salehi, who heads the Atomic Energy Organization of Iran, as saying that Iran has proposed to redesign Arak to produce one-fifth of the plutonium initially planned for it. He said that will eliminate concerns the West has that Iran could use the plutonium produced at Arak to build a nuclear weapon.

"The issue of heavy water reactor ... has been virtually resolved," state television quoted Salehi as saying. "Iran has offered a proposal to ... redesign the heart of the Arak facility and these six countries have agreed to that."

There was no immediate comment from world powers, which include China, France, Germany, the United Kingdom, the U.S. and Russia. However, what to do with Arak, a still under-construction 40-megawatt heavy water plant in central Iran, is a key factor in negotiations.

Iranian Foreign Minister Mohammad Javad Zarif, his country's chief negotiator, suggested in March his country might redesign Arak to allay the West's fears. The West suspects Iran could use its nuclear program to build nuclear weapons. Iran says its program is for peaceful purposes, like power generation and medical research.

Salehi said the U.S. and its allies "constantly say Iran has to give up its heavy water reactor because it provides a breakout capacity."

"We took this pretext from their hands," he said.

Redesigning the reactor will delay its launch by about three years, Salehi said. He said instead of uranium oxide, the reactor will use low enriched uranium. Changing the fuel is part of the technical modifications that greatly reduce the amount of plutonium made by the reactor.

Salehi also said Iran has completed diluting its higher enriched uranium into less volatile forms as part of an interim deal reached last November with world powers.

"On April 12, about 103 kilograms of uranium were diluted," he said. "That means it was converted from 20 percent enriched uranium into 5 percent. In general, the case of dilution is closed."

Salehi also told Al-Alam, the Arabic channel of Iranian state television, that a proposal from the six-nation group was to change the heavy water reactor into a light water reactor. He suggested that Iran didn't agree with that because a heavy water reactor is needed to produce radioisotopes to treat medical patients while a light water reactor, like the one Iran has at Bushehr, is used to generate electricity.

Under the November deal, Tehran stopped enrichment of uranium to 20 percent which is a possible pathway to nuclear arms in exchange for the easing of some Western sanctions. It also agreed to dilute half of its 20 percent enriched uranium into 5 percent and turn the remaining half into oxide, which is very difficult to be used for bomb-making materials.

Also as part of the deal, Iran has allowed international inspectors from the United Nation's nuclear watchdog the International Atomic Energy Agency to visit its nuclear facilities, including Arak.