Iran insists it will not freeze nuclear work

TEHRAN (AFP) - Iran has insisted it will not freeze uranium enrichment, in defiance of a UN resolution and warned it could even expand its nuclear programme which the West fears is a cover for efforts to build the bomb.

"Our activities respect the Non-Proliferation Treaty... so we will not accept the suspension (of uranium enrichment)," nuclear chief Ali Larijani told a news conference Sunday, in the first formal reaction to the July 31 resolution.

"They should know that such resolutions will not affect our determination. We will pursue the nuclear rights of Iranians which are enshrined in the NPT."

The UN Security Council resolution requires Iran to halt uranium enrichment and other sensitive nuclear fuel work by August 31 or face the prospect of sanctions.

"This resolution has no legal credibility and it negates the purpose of the (International Atomic Energy) Agency," Larijani said.

The resolution was pushed through after Iran ignored a previous non-binding deadline and failed to respond to an international offer of a package of incentives in exchange for a moratorium on nuclear fuel work.

Iran, OPEC's second largest oil exporter, insists it wants to enrich uranium only to make reactor fuel for power stations, but there is widespread suspicion the country wants the capacity to make weapons-grade uranium.

And Larijani warned world powers against imposing sanctions, suggesting that Iran could use oil as a weapon.

"It will have a huge international impact. They will lose more than us. They should not do something that will leave them shivering in winter".

Larijani also said that Iran could expand its nuclear activities by increasing the cascade of centrifuges used for uranium enrichment.

In April, Iran said it had successfully enriched uranium to 3.5 percent using 164 centrifuges. It also plans to install 3,000 centrifuges at its enrichment plant in Natanz, central Iran, by the end of the Iranian year in March 2007.

To reach weapons-grade material, the enrichment level has to reach more than 90 percent.

Larijani however said that Iran was still studying the package of incentives offered by Britain, China, France, Germany, Russia and the United States on June 6, saying it "had the potential to resolve the nuclear issues".

The package, handed to Tehran on June 6, offers trade, technology, diplomatic and other incentives as well as multilateral talks -- also involving the United States -- if Iran agrees to freeze enrichment.

Larijani said Iran would respond to the offer by August 22, but that the UN resolution had "badly affected the opportunity (represented by the offer) and our attitude".

"The question is not what Iran's response will be, but to create an atmosphere to pursue the process (of negotiations)."

"The proposal has positive points as well as ambiguities. Negotiations must be constructive and away from pressure, to enable the ambiguities to be removed," he added.

"Even if they (the UN Security Council members) have any reasons to (demand) suspension of enrichment they should address them in negotiations. But they cannot prescribe it before talks," he said.

The Security Council has charged IAEA chief Mohammed ElBaradei with reporting back on Iranian compliance.

If it does not comply, the council would consider adopting "appropriate measures" under Article 41 of Chapter 7 of the UN Charter, which relates to economic sanctions.