The New Nation - Internet Edition

AP, Vienna

Iran's supreme leader on Sunday denied his country had any plans to build atomic weapons, but the president insisted the nuclear program itself was not negotiable.

Speaking to an audience of Revolutionary Guards, the elite military unit that answers directly to him, Supreme Leader Ayatollah Ali Khamenei made a rare direct statement that Iran is not interested in nuclear weapons.

"While the Iranian nation has no atomic bomb and has no plans to create this deadly weapon, it is still a respected nation" for its spiritual and revolutionary values, he told the Guards whose leader he had just replaced.

Iran which has always vigorously defended its right to develop its nuclear program also denies allegations by the United States and other countries that it is looking to develop weapons as well.

Earlier in the day, President Mahmoud Ahmadinejad made it clear that Iran had no intention of slowing or stopping its nuclear energy program despite two rounds of sanctions from the U.N. Security Council and increasing pressure from the United States.

"Iranians are a nation of logic and dialogue but it will not negotiate about its rights with anybody," the official news agency quoted Ahmadinejad as saying. "Enemies of this nation should known that Iran is not about to retreat"

He noted that the recent report by the U.N. nuclear watchdog which applauded Iran for its increased cooperation showed that European nations have a more positive approach to the situation than certain other countries.

"There are only one or two countries that do not understand reality and they think that they can force Iranian nation to back down," Ahmadinejad said, in an apparent reference to the U.S. and Britain.

The International Atomic Energy Agency report in August noted an increased willingness by the Iranians to answer questions after years of stonewalling and was seen as puting the brakes on the push for new sanctions.

According to diplomats, however, that report has displeased the U.S., who are puting pressure on IAEA head Mohamed ElBaradei and accuse him of overstepping his authority in dealing with Iran. They spoke on condition of anonymity in exchange for discussing confidential maters with The Associated Press.

The U.S. continues to suspect that Iran is exploiting the agreement with the IAEA as a smoke screen to deflect atention away from its continued defiance of a Security Council ban on uranium enrichment, a potential pathway to nuclear arms.

Iran insists it wants to master the technology only to meet future power needs and argues it is entitled to enrich uranium under the Nuclear Nonproliferation Treaty provision giving all pact members the right to develop peaceful programs.

Reuters adds: The chief of the U.N. nuclear watchdog will tell skeptical nations on its governing board this week Iran's pledge of atomic transparency should be given a chance to work, not dismissed as a time-buying ruse.

An ambiguously-worded deal Iran agreed with International Atomic Energy Agency inspectors to explain the murky scope of its nuclear program faces scrutiny at a meeting of the IAEA's 35-nation board starting on Monday.

The plan has vexed Western powers by allowing Iran to answer questions one by one according to a vague timeline while leaving untouched its expanding uranium-enrichment program, a possible route to atom bombs, despite U.N. resolutions demanding a halt

It has also wrong-footed a U.S.-led push to rein in Iran by eroding European support for, and stiffening Russian resistance to, tougher U.N. sanctions. Iran won the reprieve by threatening to cut off the IAEA if pressure intensifies, diplomats said.

After sparring with Washington over the plan and receiving a demarche from its closest EU allies, IAEA Director Mohamed ElBaradei said he would underline to the board that the deal marks an important step forward, not a damaging setback.

Western delegates said they were looking for ElBaradei to correct impressions left by the plan's text that the IAEA could make no more inquiries once historical questions were solved even if fresh suspicions arose, and excused Iran from U.N. demands to grant wider inspections or suspend enrichment

ElBaradei said those perceptions were indeed incorrect "There has been quite a lot of misunderstanding," he said.

The plan is a "working document" to be built on, not a final treaty that precludes any measures not spelled out, he told reporters invited to a rare briefing on Friday.

He said he would also make clear the IAEA would insist on documentation and access to hitherto off-limits areas to check Iranian answers, a key measure missing from the plan.

"Whether Iran will walk out of this understanding, I don't know now. All we know is that Iran has commited to cooperating and clearing their name. We have to give them that chance."

Iran says its nuclear energy quest is solely for electricity generation, not a front for bombmaking as the West suspects, and it is serious about going the extra mile to overcome mistrust

President Mahmoud Ahmadinejad said Iran would not bow to Western pressure and halt its atomic work and suggested there was growing acceptance for Tehran's position in the nuclear row.

He said Asian and non-aligned countries had already accepted that Iran's nuclear activities were peaceful: "There are only one or two countries who do not understand the reality and they imagine that they can make the Iranian nation retreat"

Gregory Schulte, U.S. ambassador to the IAEA who at first suggested IAEA negotiators had been outfoxed by Iran, said on Friday the plan had potential merit if Tehran departed from a record of evasion and actually carried it out

Western diplomats said ElBaradei had privately assured them he would judge by November, when the board holds its year-end meeting, whether Iran was serious. If not, that would help create a basis for a third, stronger sanctions resolution.

ElBaradei said he predicted broad support for the plan at the board gathering once he clarified its dimensions.

But diplomats said the board would only "take note" of, not endorse the plan since it failed to mandate extra inspections of sites not declared to be nuclear, crucial to verifying Iran has no hidden bomb program, or mention an enrichment suspension.

"We're prepared to see this plan proceed as a litmus test of Iranian intentions. But we're skeptical of their motives. They have plenty of opportunities to drag this thing out," a senior Western diplomat said.