Iran says atomic drive brings powers "to their knees"

TEHRAN (Reuters) - The Iranian president said on Wednesday Iran's determination to continue its disputed nuclear programme had brought major powers "to their knees".

In another defiant speech ahead of an International Atomic Energy Agency report on Iran due on Friday, Mahmoud Ahmadinejad said Iran would ignore calls by major powers to halt sensitive nuclear work that has led to two rounds of U.N. sanctions.

"The Iranian nation will not allow any power to trample even on its smallest (national) right," he said in a televised address to a rally in the southern port city of Bandar Abbas.

As well as worrying the West, Ahmadinejad's uncompromising speeches have stoked concerns among moderate politicians in Iran ahead of a March parliamentary election. Critics say he is pushing Iran into international isolation.

Former nuclear negotiator Ali Larijani, who is running for a parliament seat, said in remarks published on Wednesday he had quit the post of negotiator over "differences on management mechanism" with Ahmadinejad. He did not elaborate.

The U.N. nuclear watchdog report was expected to be out on Friday. IAEA chief Mohamed ElBaradei has cited "good progress" in resolving outstanding issues although diplomats said the inquiry looked unlikely to be completed by Friday.

U.N. Security Council members will scrutinise the details in his report before finalising a draft for a third and broader round of sanctions, which is now being considered.

"The Iranian nation's will to continue nuclear work has won over the will of big powers ... (and) brought them to their knees," said Ahmadinejad, to chants from the crowd of "Death to America" and "Nuclear energy is our obvious right".

ANSWERING QUESTIONS

Under Iran's system of clerical rule, the final word in nuclear policy lies with Supreme Leader Ayatollah Ali Khamenei. He has also said Iran will not stop efforts to develop nuclear energy. Western powers suspect Iran is really after atom bombs.

Tehran insists its work is entirely peaceful and only aimed at mastering technology to be used to generate electricity.

"Today the (IAEA), which is legally in charge of this case, has prepared a report and announced that Iran's activities are legal and there is no diversion," Ahmadinejad said.

"Big powers should respect the agency and its findings."

The IAEA, seeking answers to longstanding questions about Iran's programme, has clarified a series of issues under a transparency deal reached with Larijani last August.

Larijani told the Financial Times that Iran had responded to the IAEA to show the country's nuclear plans were peaceful. "We have finished answering all their ... questions," he said.

But a senior diplomat close to the IAEA said the last and toughest issue remained under discussion -- alleged links under military supervision between uranium processing, high explosives tests and design work on missile warheads.

Diplomats accredited to the IAEA said they did not expect this file, also known as "weaponisation" of nuclear materials, to be resolved by the time of the IAEA report, despite a January IAEA-Iran deal to wrap up the inquiry by mid-February.

The IAEA received U.S. intelligence on "weaponisation" in 2005. Last month, Washington, after long hesitation for fear of exposing sources, authorised the IAEA to share some of the data with Iran in hopes of extracting an Iranian "confession", Vienna diplomats said. Tehran has long denied such accusations.

Washington is leading efforts to broaden sanctions over Iran's refusal to stop enriching uranium, a process with both civilian and military applications.

Russia and China, trade partners with Iran, watered down the latest sanctions draft after a U.S. intelligence report saying Iran stopped an active, covert nuclear bomb programme in 2003.