In an article about the negotiations between Apple and the European carriers, The Financial Times reports that the iPhone will run at first on 2.5 generation networks rather than the faster 3G. Like in the US, users will only have access to GPRS and EDGE.
Rumours about 3G enabled iPhones for Europe have swirled for a while but I would be surprised to see Apple release a 3G version in Europe so soon after the release of the US 2.5G version. A 2008 date is more likely.
The Financial Times also confirm that the contract with O2 is still not signed.