Iran to reject key demand in N-package

Tehran: Iran, set to reply on Tuesday to an offer by world powers aimed at defusing a nuclear standoff, has insisted it would not stop enriching uranium, as they demand by an August 31 deadline to avoid possible sanctions.

Refusing to suspend the work, which Iran says is aimed only at generating electricity but which the West sees as a disguised bid for atom bombs, would be tantamount to rejecting the package of incentives offered in return, Western diplomats say.

But a rebuff would not yet trigger immediate action by the UN Security Council, which passed a resolution on July 31 giving Iran a month to halt enrichment or risk sanctions.

"We are not treating Tuesday as a deadline because it is not the Security Council deadline," one Western diplomat said.

"If Iran flatly refuses to suspend enrichment, then there will, fairly soon, be more talks in the Security Council." Ali Larijani, chief nuclear negotiator, will hand Iran's written response to foreign ambassadors in Tehran at the Supreme National Security Council, which handles the nuclear file, a senior Iranian nuclear official said.

Tensions rose further as diplomats close to the UN nuclear watchdog said its inspectors were denied access to an underground site under construction where Iran plans industrial- scale production of enriched uranium.

A senior diplomat said blocking inspectors this way could be a violation of the nuclear Non-Proliferation Treaty since the UN inspectors have a right to verify design information during the construction of a nuclear facility.

Iran denied hindering access to the Natanz installation for an International Atomic Energy Agency team visiting to gather information for an August 31 report to the Security Council.

The US, France, Britain, Germany, China and Russia offered a package of economic and other incentives in June, aiming to persuade the Islamic Republic to stop work that the West says is helping build nuclear warheads.

Iran, which has denounced the deadline as illegal and worthless, said it would reply by the end of the Iranian month of Mordad, August 22.

The world's fourth largest oil exporter insists it will not abandon what it calls its right to enrich uranium for use in nuclear power stations.

The response will be handed to all six countries, with the Swiss ambassador taking a copy for the US, which has had no representation in Tehran since after the 1979 revolution.