Iran's president rejects European offer of incentives

~ Iran insists program is designed only to build electricity-generating reactors.

TEHRAN, Iran -- Iran's president said Sunday it was pointless for Europe to devise an incentive package if it required Tehran to stop enriching uranium -- effectively thwarting the latest international diplomatic effort before it even began.

President Mahmoud Ahmadinejad spoke on state television after returning from Indonesia, where he was warmly welcomed and won developing nations' support for the peaceful production of nuclear energy.

The hard-line leader said proposals for a political and economic package being shaped by the European Union were "invalid" if "they want to offer us things they call incentives in return for renouncing our rights."

Also Sunday, a Foreign Ministry spokesman declared "insignificant" reports that inspectors from the U.N. nuclear watchdog agency found traces of highly enriched uranium on equipment from an Iranian research center.

Refusing to budge in his relentless and strident campaign to assert Iranian regional power and leadership, Ahmadinejad said opponents of Tehran's nuclear program were "living in the era of colonialism" and did not respect Iran's national sovereignty.

Iran insists its nuclear program is designed only to build electricity-generating reactors. The United States and some allies suspect Tehran is hiding a military program to make nuclear weapons.

Ahmadinejad's remarks were clearly aimed at European Union foreign ministers meeting today in Brussels, Belgium, to consider sweetening a package of incentives that would entice Iran to suspend uranium enrichment -- an issue that has now reached the U.N. Security Council but was put on hold to give the EU more time for diplomacy.

In August, Iran rejected an initial European initiative that included economic benefits and the transfer of some nuclear technology for a civilian program. Iran has repeatedly stalled or waffled on a November offer from the Kremlin to enrich uranium on Russian soil for use in Iranian reactors.

In January, Foreign Minister Manouchehr Mottaki said Iran would not give up control over a single step of the nuclear fuel cycle -- from mining uranium to enriching it. Iran then announced it was resuming research-level uranium enrichment.

In February, the International Atomic Energy Agency board voted to report Iran to the Security Council, and Tehran vowed to immediately start work on full-scale uranium enrichment and curtailed the IAEA's powers in Iran -- ending intrusive, surprise inspections.

At the Security Council, the United States -- with limited backing from Britain and France -- sought a tough resolution to declare Iran a threat to world peace and subject it to sanctions or even military action.

But Russia and China, both of whom hold vetoes in the council, opposed such dramatic measures. Given the divisions among the five permanent members of the council, which includes the U.S., Britain and France, Washington was forced to back down while the European Union took another run at a diplomatic solution.

In London, Venezuelan President Hugo Chavez said a U.S. attack on Iran over its nuclear program would set off an enormous military escalation in the Middle East and send oil prices soaring to $100 a barrel.

Chavez said an attack would force Iran to cut oil production. "My English friends ... should park their vehicles because oil could reach $100 a barrel or more," Chavez told British lawmakers and left-leaning activists.

A document posted on the EU's Web site said the ministers were likely to express the bloc's "preparedness to support Iran's development of a safe, sustainable and proliferation-proof civilian nuclear program, if international concerns were fully addressed."

But European officials said no major progress on a final proposal could be expected at the Brussels meeting. The plan would be held in reserve until after talks among nonproliferation officials from the five permanent members on Friday in London.

Iran also showed its determination not to step back when Foreign Ministry spokesman Hammed Reza Asefi on Sunday dismissed a report two days earlier that IAEA inspectors had found traces of highly enriched uranium on some of Iran's nuclear equipment.

"It's insignificant. It's not important. Previously, things like this were said but later inspectors arrived at the right conclusions," Asefi told reporters.

It was the second time the IAEA inspectors found traces of highly enriched uranium at Iranian facilities. The first discovery was later traced to equipment from Pakistan that Iran bought on the black market during nearly two decades of clandestine activity.