TEHRAN, Iran -- Iran on Sunday denounced as "illegal" demands from the U.N. atomic watchdog agency that it freeze all work on uranium enrichment -- a technology that can be used for nuclear weapons -- and threatened to limit cooperation with the agency if it moves toward sanctions. But Iran's top nuclear negotiator, stopped short of outright rejection of the International Atomic Energy Agency's demands and held out the possibility of negotiations on the issue.
"We are committed to the suspension of actual enrichment, but we have no decision to expand the suspension," Rowhani said at a news conference a day after the IAEA governing board issued its demand to freeze all enrichment-related work and said it would judge Tehran's compliance in two months.
"This demand is illegal," he said. "The IAEA board of governors has no right to make such a suspension obligatory for any country."
"Actual enrichment" refers to the injection of uranium gas into centrifuges. Rowhani indicated Iran's other activities, such as production, assembly and testing of centrifuges, were likely to continue.
Such ambiguity has led U.S. and other officials to accuse Iran of hiding an intention to create a nuclear weapons and trying to stonewall the international community. Iran says its nuclear program is only for peaceful energy purposes.
"We have no dependency on the outside world to control the nuclear fuel cycle. We don't need parts or technology," Rowhani said.
"We possess all the requirements," he added, referring to the steps from mining uranium ore to enriching uranium for use either to produce electricity or nuclear weapons. Analysts say any country that controls that cycle can produce nuclear weapons at will.
If the IAEA refers questions about Iranian nuclear activities to the U.N Security Council for possible sanctions, Rowhani said: "Iran will stop implementing the additional protocol and will limit its cooperation with the IAEA."
Under the additional protocol to the Nuclear Nonproliferation Treaty that Iran signed last year, it is required to allow unfettered inspections of its nuclear facilities. Iran began implementing the additional protocol right away, though technically it has yet to be ratified by the parliament and made into law.
More than 200 lawmakers in Iran's conservative-dominated parliament threatened on Sunday to block ratification.
Iran is not prohibited from enrichment under its obligations to the Nuclear Nonproliferation Treaty. But for months it has faced international pressure to suspend such activities as a good-faith gesture.
The United States insists the 35-member IAEA board must refer Iran to the Security Council when it meets again on Nov. 25 if Tehran doesn't comply.
U.S. Energy Secretary Spencer Abraham, in Vienna for a conference of the Global Threat Reduction Initiative -- meant to secure radioactive materials and keep them out of terrorists' hands -- warned Iran to heed the IAEA decision.
"I think the board sent a very clear message that Iran must cease its pursuit of (nuclear) weapons and ... suspend its enrichment activity," he told reporters.
"We should all expect that Iran should follow the obligations" laid down by the resolution, he said. "The clock is ticking down, and I believe they should comply with the resolution."
In an interview with the CNN show "Late Edition," IAEA chief Mohamed ElBaradei urged Iran to heed the international call and suspend all enrichment-related activities.
"What I am asking Iran for (is) please build the confidence. Please work with me to build the confidence through the agency. Please allow us to verify all outstanding issues," he said. "If we can do that, then we can trigger a political dialogue."
Rowhani said dialogue, not demands, may elicit Iranian concessions.
"No resolution can impose an obligation on Iran to suspend activities. If there is a way, it will be the way of dialogue," he said.
Rowhani did not rule out talks with the United States.
"We had talks with America under the auspices of the United Nations over Afghanistan and Iraq in the past. ...I don't want to say dialogue with America is ruled out over our nuclear dossier," he said. "If they (the Americans) give up a policy of threat, we can consider dialogue with them."
The IAEA board unanimously approved a toughly worded resolution Saturday saying it "considers it necessary" that Iran suspend all uranium enrichment and related programs. It expressed alarm at Iranian plans to convert more than 40 tons of raw uranium into uranium hexafluoride -- the gas that when spun in centrifuges turns into enriched uranium.
It called on ElBaradei to provide a review of the investigation of Iran's nuclear activities and said the next board meeting in November "will decide whether or not further steps are appropriate" in ensuring Iran complies, suggesting that Iran could have to answer to the Security Council if it defies the demands.