The plan without fuel would also include Arab states in the region, Graham said.
“When you don’t make your own fuel, your can’t make a bomb. It is possible to have nuclear power without enriching and reprocessing,” Graham told reporters in Jerusalem on Tuesday.
He spoke just after Tehran this week said it had amassed more low-enriched uranium than is permitted under the 2015 Iran deal that curbed Iran’s nuclear capability. Known as the Joint Comprehensive Plan of Action, the deal was worked out with the six major world powers: the US, Russia, China, Great Britain, France and Germany. Last year, Washington pulled out of the deal, which was designed to prevent Iran’s production of nuclear weapons in exchange for lifting most of the international sanctions against it.
In addition to pulling out of the deal, the US has imposed sanctions against Iran. The remaining five world power have urged Tehran to remain in the deal, but this week, the Islamic republic appeared to have broken one of the deal's components when it exceeded its limit on enriched uranium.
Graham said that he supported US President Donald Trump’s decision to leave the Iran deal, but said that, “there is an obligation to replace it with something.”
He continued: “I will be proposing, in the next few days, a regional 1-2-3 agreement where the Iranians and the Arabs can have nuclear power but can’t enrich or process uranium.”
There are 15 nation states in the world that have nuclear power programs without making their own fuel, Graham said.
In light of Iran’s actions this week, Graham said, the US should work with Israel to come up with a common redline as to what would be unacceptable regarding Iran’s enrichment program.
“Right now, I don’t know what our redlines are. What would concern me most is for the Iranians to be in the dark as to what would be a redline for Israel and the US regarding their nuclear enrichment program,” Graham said.
It is important to ensure that, “we don’t blunder into a situation where military force has to be used,” he said.
Foreign Minister Israel Katz told an international security forum in Herzliya on Tuesday that Iran might accidentally stumble out of what he termed the "gray zone" of contained confrontation.
"It should be taken into account that mistaken calculations by the [Iranian] regime... are liable to bring about a shift from the 'gray zone' to the 'red zone' - that is, a military conflagration," Katz said.
"We must be prepared for this, and thus the State of Israel continues to devote itself to building up its military might in the event that it will have to respond to escalation scenarios."
Israel has long threatened to take preemptive military action to deny Iran the means of making nuclear weapons. Tehran says it has no such designs. One of its senior lawmakers warned on Monday that Israel would be destroyed within "only half an hour" should the United States attack Iran.
Iranian Foreign Minister Mohammad Javad Zarif denies that Iran is in violation of the nuclear accord by amassing more low-enriched uranium, saying Iran is exercising its right to respond following the US pullout.
By exceeding the limit, Tehran could prompt the return of all international sanctions on Iran. But one European diplomat, asked if Europe would trigger a dispute-resolution mechanism that is part of the accord, said: "Not for now. We want to defuse the crisis."
Iran's main demand – in talks with the European parties to the deal and as a precondition to any talks with America – is to be allowed to sell its oil at the levels before Washington pulled out of the deal and restored sanctions.
Iranian crude exports were up to 300,000 barrels per day in late June, industry sources said – a fraction of the more than 2.5 million bpd Iran shipped in April 2018, the month before Trump withdrew from the nuclear deal.
Tehran says that it will breach the deal's nuclear curbs one by one until it is able to sell that amount of oil, saying this is the least it should be able to expect from an accord that offered economic gains in exchange for nuclear restrictions.
Iran's semi-official Fars News Agency reported on Monday that the Islamic republic's enriched uranium stockpile had passed the 300kg (661 lb) limit allowed under the deal.
"We have NOT violated the #JCPOA," Zarif wrote on Twitter, referring to the deal by the abbreviation of its formal title, the Joint Comprehensive Plan of Action.
Iran's parliamentary speaker Ali Larijani accused Trump of trying to bully Tehran with his remark about playing with fire, saying that such language would only made Iran stronger.
Reuters contributed to this report.