Iran vows no nuclear retreat as deadline looms

Acknowledges U.S. respect, hopes it continues

TEHRAN (Agencies)

President Mahmoud Ahmadinejad on Wednesday vowed that Iran would not yield in the crisis over its nuclear drive but the White House warned again that it risks more sanctions if it fails to freeze sensitive nuclear work.

"The Iranian people are steadfast and will not step back an inch against the oppressive powers," Ahmadinejad told a rally in the southwestern province of Kohgelouyeh-Boyerahmad.

His defiant comments come after world powers warned Iran has only a fortnight to respond to their latest offer seeking to end a five-year crisis that has raised fears of regional conflict and sent oil prices spiralling.

The White House said it was still hopeful Tehran would suspend its controversial nuclear activities, otherwise more international sanctions would follow.

"We hope the Iranians will provide a positive answer," national security spokesman Gordon Johndroe said. But "if they do not, the international community is united that more sanctions are coming."

Sanctions

World powers have offered to start pre-negotiations during which Tehran would add no more uranium-enriching centrifuges and in return face no further sanctions -- the so-called "freeze-for-freeze" approach.

Iran is already under three sets of U.N. Security Council sanctions over its refusal to halt sensitive uranium enrichment work. The West suspects Iran wants to build atom bombs but the Islamic Republic says its aims are peaceful.

"If you imagine that by some threats, sanctions and pressure you can make the Iranian nation retreat, you are again making a mistake," Ahmadinejad said in a speech in the southern city of Yasuj.

With respect

But Iran's president also said the senior U.S. diplomat at the meeting, William Burns, had shown respect towards Iran -- an unusual compliment about a representative of a country that Iran's clerical leaders call "the Great Satan".

In a shift of U.S. policy, Burns for the first time joined European Union foreign policy chief Javier Solana and envoys from China, Russia, Britain, France and Germany.

The United States, which broke off relations with Iran in 1980 after the overthrow of its ally the Shah and has branded it as part of an "axis of evil", is considering whether to open an interests section in Tehran. This would allow for diplomatic contact while falling short of diplomatic ties.

But Washington, which has led the efforts to thwart Iran's nuclear drive, has also warned Tehran of "punitive measures" if it spurns the international offer and presses on with enrichment work.

"Their representative in the meeting spoke politely and in a dignified way and he kept respect for the Iranian nation and this was a positive step," Ahmadinejad said.

Addressing Washington, he added: "I advise you not to spoil this positive step...by using the language of colonial times and by bullying."

Tug o' war

Iran denies allegations of seeking nuclear weapons, insisting that its program is designed to provide energy for its growing population when the OPEC member's reserves of fossil fuels run out.

Permanent Security Council members -- Britain, China, France, Russia and the United States -- plus Germany have made Iran an offer, which includes trade incentives and help with a civilian nuclear program in return for suspending enrichment.

Ahmadinejad alleged that world powers "do not mind centrifuges and enrichment... but that they want to show the world they can force the Iranians to retreat with a psychological operation and deception."

The New York Times on Tuesday released what it said was a two-page informal document that outlined Tehran's approach to talks in Geneva and was distributed by Iranian negotiators.

The paper called for seven more rounds of talks, stressed the need for an end to sanctions, and made no mention of an incentives package.

Iranian officials have repeatedly said they have no intention of freezing enrichment and that as a signatory to the nuclear Non-Proliferation Treaty, Iran has the right to make its own nuclear fuel.

However, Iran's first Russian-built nuclear power plant is yet to be completed and come online.

Breakthrough?

Hopes of a breakthrough rose in recent weeks after Ali Akbar Velayati, the top foreign policy advisor to supreme leader Ayatollah Ali Khamenei, said it would be in Iran's interests to accept the package.

Ahmadinejad, who has already dismissed Velayati's comments as personal, reaffirmed that he was in charge of Iran's nuclear case.

"They (world powers) thought the nation was divided, that the people and the president had been sidelined in the nuclear case and that they would be able to impose their views.

"But I told them they were mistaken to celebrate and their feast would soon turn into a funeral."