Iran Digs In Over Nuclear Crisis

President Mahmoud Ahmadinejad was due to give a press conference -- only his second since his shock election win last June -- with the controversial hardliner expected to repeat his defiant stance.

He has already vowed not to compromise "one iota" on his country's nuclear program, especially efforts to master the fuel cycle.

Quoted by the official news agency IRNA, national security spokesman Hossein Entezami said Iran was still open to negotiations with the European Union -- but said it was not ready to discuss research activities at the centre of the current stand-off.

"The subject of the negotiations with the Europeans is uniquely (full-scale) uranium enrichment, and the matter of nuclear research is not a part of that," he said. "The decision by Iran to carry out research activities is serious."

Small-scale enrichment now

Iran resumed research this week, with the work involving small scale enrichment to test centrifuges. It insists this is separate from full-scale uranium enrichment, which remains frozen for the time being.

Iran says its nuclear program is only directed towards generating electricity and is entirely legal, although the enrichment process can be extended to make atomic bombs.

The three main EU powers -- Britain, France and Germany -- have for more than two years been trying to convince Iran to voluntarily limit its nuclear activities in exchange for trade and other incentives.

But Iran has consistently refused striking any such deal, and since Ahmadinejad's election win has been progressively been backing away from a temporary freeze on fuel cycle work agreed to in 2003 and again in 2004.

Talks next week

EU, US, Chinese and Russian officials are due to hold talks in London on Monday, when they are expected to set a date for an emergency meeting of the International Atomic Energy Agency's 35-nation board of governors.

Both the EU and the US are now pushing for Iran to be referred to the UN Security Council, hoping to back up a series of IAEA calls -- so far ignored -- for Tehran to return to a full nuclear freeze.

"It's logical that a country which has rejected diplomatic" efforts to end the crisis "be sent to the United Nations Security Council," US President George W. Bush said at a joint press conference with visiting German Chancellor Angela Merkel in Washington on Friday.

If Iran obtained nuclear weapons, it would pose "a grave threat to the security of the world," Bush said, recalling how Ahmadinejad had called last year for Israel to be "wiped off the map."

Germany warns against sanctions

But so far the West has played down any talk of immediate sanctions or even military action.

Germany's Deputy Foreign Minister Gernot Erler told German radio in an interview to be broadcast on Sunday that imposing economic sanctions against Iran would be a "very dangerous path."

He said he favored imposing travel restrictions on Iranian politicians, since they would have "an extraordinarily unpleasant impact."

Iran has warned that a referral to the Security Council would bring serious consequences from its side.

"All voluntary means of cooperation" with the IAEA would end, Foreign Minister Manouchehr Mottaki warned Friday.

This could entail an end to tougher UN inspections of Iranian nuclear sites or even result in a resumption of full-scale uranium enrichment.

The mounting crisis is affecting the world energy markets: oil futures closed marginally lower Friday in line with falls for natural gas, but traders said anxiety remained about the nuclear crisis surrounding Iran.