Iran rules out nuclear halt after deal offer

Top EU diplomat Javier Solana handed Iran an offer by six major powers of trade and other benefits on Saturday to try to coax it into halting sensitive nuclear work, but Tehran again ruled out any such suspension.

The United States and its European allies have warned the Islamic Republic of more sanctions if it presses ahead with a nuclear programme they fear is aimed at making bombs.

The world's fourth-largest crude producer is refusing to stop activities it says are for generating electricity.

"Iran's view is clear: any precondition is unacceptable," government spokesman Gholamhossein Elham said when asked about the package of incentives offered by the United States, China, Russia, France, Britain and Germany.

"If the package includes suspension it is not debatable at all," he told reporters.

Although Iran has not officially rejected the offer, U.S. President George W. Bush said he was disappointed when asked about Elham's statement during a visit to Paris.

"I am disappointed that the Iranian leaders rejected this generous offer out of hand," Bush told a joint news conference with French President Nicolas Sarkozy, adding it was a sign that Iran's leadership was willing to isolate its people further.

Elham was speaking shortly after Solana, the European Union's foreign policy chief, presented the proposal to Iranian Foreign Minister Manouchehr Mottaki.

The offer, including civilian nuclear cooperation, is a revised version of one rejected by Iran two years ago and diplomats have played down any hopes of a breakthrough in a dispute that has helped push up oil prices to record highs.

Mottaki suggested Iran was ready to engage in negotiations but linked its response to the world powers' incentives to their reaction to Tehran's own package of proposals aimed at defusing the row, submitted to the EU and others last month.

"It is natural that Iran's response ... will depend on the logical and constructive response of (the six powers) to the Iranian package," Mottaki said, according to IRNA news agency.

PACKAGE DIPLOMACY

Diplomats say Iran's package ignored concerns about its uranium enrichment programme, a possible pathway to atom bombs, but IRNA quoted Solana as saying there were "common points" which could help pave the way for negotiations.

The incentives package, hammered out by the six major powers in May, is an updated and enhanced version of an offer spurned by Iran in 2006 that also included wider trade in civil aircraft, energy, high technology and agriculture.

Solana said on Friday the offer, which he described as "generous", would support Iran in developing a modern nuclear energy programme and also covered political and economic ties.

Iran's refusal to stop enrichment, which can provide fuel for power plants or material for bombs if refined much more, has drawn three rounds of U.N. sanctions since 2006.

Tehran has shrugged off the impact of such measures, saying it earned $70 billion (35 billion pounds) in oil revenue last year. But analysts say the nuclear row is hurting foreign investment in a country also struggling with 25 percent annual inflation.

The United States, leading efforts to isolate Iran over its nuclear ambitions, says it wants a diplomatic solution but has not ruled out military action as a last resort.

On a farewell tour of Europe this week, Bush said a nuclear-armed Iran would be "incredibly dangerous for world peace" and that "all options are on the table" to thwart its atomic ambitions.

Solana was accompanied in Tehran by senior officials from the major powers with the exception of the United States, which cut ties with Iran after its 1979 Islamic revolution.