The United States has rejected Iran's offer to allow inspections of its nuclear facilities and Washington will continue to press the UN Security Council to penalise Tehran.
Iran offered to allow inspections to resume if the Security Council turned the dispute over to the International Atomic Energy Agency (IAEA), but US secretary of state Condoleezza Rice yesterday dismissed the offer as a ploy.
"I think they're playing games. Every time we get close to a Security Council decision there's some effort to say, 'Oh no, we really were interested in that proposal that we rejected'," she told ABC's This Week.
The IAEA reported last Friday that Iran had defied the nuclear body's instruction to stop enriching uranium and Washington now wants the Security Council to approve a resolution against Tehran that could open the way to sanctions and eventual military action.
"The international community's credibility is at stake here. And we have a choice, too. We can either mean what we say, when we say that Iran must comply, or we can continue to allow Iran to defy," Ms Rice said.
Three of the Security Council's five members - the US, France and Britain - favour sanctioning Iran but Russia and China are opposed.
Iran said yesterday that it was open to dialogue but warned that imposing sanctions would provoke a strong response.
"If the Security Council discusses Iran's case and decides against us, Iran will keep all its options open. This means that if their decision is radical, Iran's reaction will be radical. If it is rational, our decisions will also be rational," foreign ministry spokesman Hamid Reza Asefi said.
Iran's chief nuclear negotiator, Ali Larijani, said Iran would continue to defy the council. "Iran will not implement any forced resolution," he said in speech to university students in Tehran.
"We have thought about a possible military attack," Mr Larijani said. "What the leader [Supreme leader Ayatollah Khamenei] said should be taken seriously . . . If they want to harm us, we will harm them."
The country's deputy oil minister, Mohammad Hadi Nejad-Hosseinian, said there was little risk of UN sanctions on Iran's energy sector while oil prices move towards record levels above $70 a barrel.
Iran's atomic energy minister disclosed yesterday that the country has enriched uranium to 4 per cent - enough for nuclear energy but far short of the 80 per cent required to make nuclear weapons.
Tehran insists that it does not want to develop nuclear weapons but that it is entitled under international nuclear non-proliferation rules to develop nuclear power.
Iranian president Mahmoud Ahmadinejad said yesterday that Iran could only negotiate with the international community if its right to develop a civilian nuclear programme was acknowledged.
"Negotiations over an undeniable and internationally acknowledged right would . . . make us eventually lose parts of our rights. Iran has been independent for the last 27 years and would not ask for permission to use the achievements of its scientists," he said.
Although the US supports European diplomatic efforts to resolve the nuclear stand-off, the Bush administration insists that it will consider all options - including military action - to stop Iran developing nuclear weapons.
EU foreign policy chief Javier Solana said on Saturday that no European country would join a "coalition of the willing" to attack Iraq.