The proximity potential is applied to the coupled-channels analysis of the inelastic scattering of heavy ions. It is shown that a suitably chosen proximity potential accurately reproduces the effect of a folding-model interaction between spherical nuclei. The heavy-ion Woods-Saxon potential is then considered as the result of a folding procedure and presented as an optional form for a proximity type potential. An analysis of the collision between spherical and deformed nuclei shows that, while the proximity potential well reproduces the folding model for this system, the proximity and center-line potentials lead to the extraction of significantly different values of high-multipole deformations. Formulas appropriate to the proximity interaction between two deformed nuclei are also presented. NUCLEAR REACTIONS Sm152(O16,O162)Sm152, calculated (0+,2+,4+,6+) in coupled channels with deformed proximity potential; determined 26.