Crisis Looms as Iran Rejects EU Nuke Offer

"The proposals are unacceptable," nuclear negotiator Hossein Moussavian said, describing them as a "clear violation" of agreements between Iran and the European Union. "They negate Iran's inalienable right," he said.

EU negotiators have called for an emergency meeting of the UN watchdog, the International Atomic Energy Agency, which could refer Iran's nuclear dossier to the Security Council for possible sanctions.

But a defiant Iran said it would also stick by its plans to resume uranium conversion, a preliminary stage in the nuclear fuel cycle, despite warnings that it would trigger an international crisis.

The European Union said Tehran, accused by arch-enemy the United States of seeking to build an atomic bomb, must commit "not to pursue fuel cycle activities" if it wants to benefit from the EU incentives.

Stop activities and benefit from incentives, says EU

The package, submitted by ambassadors from Britain, France and Germany, covers nuclear issues, political and security concerns, and offers economic and technological cooperation for Iran to give up uranium enrichment work.

It follows nine months of tortuous negotiations between the so-called EU-3 and Iran, which in November agreed to suspend enrichment and conversion work for the duration of the talks. The processes make fuel which can be used for reactors or the explosive core of atom bombs.

The offer comes just days after Iran's new ultra-conservative President Mahmood Ahmadinejad took office, raising international concerns about the future policies of the Islamic republic.

French foreign ministry spokeswoman Cecile Pozzo di Borgo said the EU recognizes "the inalienable right of Iran to the peaceful use of nuclear energy in conformity with the NPT and within the framework of a global accord."

Iran has said repeatedly that its enrichment suspension is temporary and voluntary, as it insists on its right under the nuclear Non-Proliferation Treaty to conduct nuclear activities for peaceful purposes.

The issue is a matter of national pride in Iran, which insists it only wants to generate nuclear power in order to meet increased domestic energy demands and reduce its dependence on oil and gas, a vital source of hard currency.

Suspicious activity but no "smoking gun"

It has been subject to more than two years of investigations by the IAEA, which has discovered plenty of suspicious nuclear activity but no "smoking gun" that proves a weapons drive.

French Foreign Minister Philippe Douste-Blazy said the world will face a "major international crisis" if Iran does not accept the proposals. "I hope Iran will heed the voice of reason." But if Iran resumes conversion, "then it is certain that the international community will ask the Security Council to intervene," he said.

Moussavian said Iran's decision resume conversion -- which turns uranium ore into a gas to be used in the enrichment process -- at its Isfahan plant was "irrevocable" despite the threat of possible sanctions. "We will in any event restart the Isfahan conversion plant," Moussavian told AFP.

Enrichment plants ready to go back online

He had also warned Thursday that if the Europeans called an IAEA meeting, Iran may not maintain its freeze on enrichment at the Natanz plant.

Pozzo di Borgo said that under the terms of the offer, the EU would guarantee a durable supply of nuclear fuel, and Iran's access to atomic technology for civilian purposes and the nuclear energy market.

Brussels would also promote trade, investment and technology transfers, work towards a trade and cooperation agreement, and support Tehran's accession to the World Trade Organization.

It also promised to develop long-term scientific and technological cooperation in various areas, as well as helping with communications, education and training, transport, tourism and seismology.