Pu-Er-Zr oxide as an inert matrix fuel (IMF) could be an attractive option for a once-through LWR strategy aimed at reducing the currently growing plutonium stockpiles. A basic question related to the practical introduction of such an IMF into a current-day LWR, without affecting any significant change in fuel element design and core performance, is the irradiation behaviour of the proposed IMF. The present paper reports first results from a corresponding validation experiment which has been launched recently, viz. the comparative in-pile testing of specialty fabricated IMF and PuO2/UO2 mixed-oxide (MOX) fuel rodlets in the Halden reactor. The maximum linear power rating was limited to about 25 kW/m during the currently reported initial testing phase, as compared to the design value of 35 kW/m to be aimed at during subsequent cycles at Halden. While fuel centre-line temperatures were found to be within the expected range for both fuel types, the variation of pressure in the rodlets has clearly indicated significant densification in the IMF specimens, with fission gas release being non-detectable at the low burnups achieved to date. A possible sintering model for the IMF is proposed to explain the experimental results obtained during this moderate-power testing phase, viz. the apparent "geometrical stability" of the IMF in spite of its strong initial densification