Defiant Iran Vows to Press on With Nuclear Program

"The Islamic republic has made up its mind, and on the nuclear program and other issues it will continue on its path with strength, with God's help," Ayatollah Ali Khamenei, the country's most powerful man, was quoted as saying on state television.

His comments came on the eve of a Tuesday deadline for Iran to formally respond to an offer by major powers, including the EU, US, Russia and China, proposing a package of incentives in return for a suspension of uranium enrichment.

The Security Council has given Iran until Aug. 31 to halt enrichment -- a process that makes fuel for nuclear power plants but can be diverted to make weapons -- or face possible sanctions. Iranian officials had said they would respond to the offer by Aug. 22.

"Arrogant powers, led by the United States, are fearful of progress of Islamic countries in various dimensions," Khamenei said. "Therefore, in the nuclear issue, even though they know Iran is not seeking a nuclear weapon, they are piling on the pressure to prevent our scientific progress as an Islamic country."

Iran, a major oil producer and a member of OPEC, says its nuclear program is purely to generate electricity but the United States and other Western countries believe it is secretly trying to develop nuclear weapons.

Response to offer on Tuesday

A nuclear official said Iran would submit a "comprehensive written response" about the incentive package to European nations on Tuesday.

The proposal, backed by the five permanent UN Security Council members -- Britain, China, France, Russia and the United States -- plus Germany, offers Tehran incentives in return for a freeze of sensitive nuclear work.

Iran has been flexing its military muscles during nationwide war games, test firing new missiles in a bid to show it was ready to face any "threat." But in a further sign that Iran was not about to back down, the country's Atomic Energy Organization said that suspension of uranium enrichment was "no longer possible" ahead of the Aug. 31 deadline.

"Given the technical progress of Iranian scientists, suspension of uranium is no longer possible under the current circumstances," deputy head Mohammad Saeedi was quoted as saying by the semi-official Fars news agency.

Saeedi also said Tehran was planning to start up its heavy water production plant in Arak which will feed a nuclear research reactor that's due for completion by 2009.

The IAEA is concerned about the proliferation risk as the reactor could produce 8 to 10 kilograms (about 20 pounds) of plutonium a year, enough to make at least two nuclear bombs.

UN Secretary General Kofi Annan appealed Sunday for Iran to reply positively to the incentives package.

"I appeal to the government of Iran to seize this historic opportunity," Annan said. "Iran's reply will, I trust, be positive and that this will be the foundation for a final, negotiated settlement."

Inspections blocked

A prominent member of the hardliner-controlled parliament had warned that lawmakers would block UN watchdog inspections at Iran's nuclear sites if the Security Council decided to impose sanctions.

But on Monday, Iran turned away UN inspectors wanting to examine its underground nuclear site in an apparent violation of the Nonproliferation Treaty, diplomats and UN officials said.

The officials, who spoke on condition of anonymity, told AP that Iran's unprecedented refusal to allow access to the facility at Natanz could seriously hamper international efforts to ensure that Tehran is not trying to make nuclear weapons.

Bush wants swift UN action

US President George W. Bush on Monday meanwhile urged the United Nations to move swiftly to impose sanctions against Iran if it refuses to stop its nuclear enrichment activities by

the Aug. 31 deadline.

Asked at a White House news conference whether he was confident the council would move quickly on sanctions if Iran defied the decision of the international community, Bush said: "I certainly hope so.

"There must be consequences if people thumb their nose at the United Nations Security Council," he said. "We will work with people on the Security Council to achieve that objective."

Germany skeptical

German Foreign Minister Frank-Walter Steinmeier expressed doubt Monday that Iran would agree in the coming days to demands to stop enriching uranium and return to the negotiating table.

"The president (Mahmoud Ahmadinejad) himself said that he will make an announcement in the coming days and I hope that his declaration will bring us back to the negotiating table," he told he told reporters after talks with Afghan President Hamid Karzai in Kabul. "But I also have to say that after the events this week, I am skeptical."