Iran has an "inalienable right" to produce nuclear fuel, the country's President, Mahmoud Ahmadinejad, has told the United Nations.
Speaking before the General Assembly, he invited other states and private companies to help with the programme.
He strongly criticised US arms policies and said Islam precluded Iran from having atomic weapons.
Under the Nuclear non-Proliferation Treaty, Iran is entitled to use nuclear energy for peaceful purposes.
However, the UK has suggested it has forfeited that right because it secretly tried to acquire the technology required to develop nuclear weapons.
The US secretary of state has meanwhile accused Iran of undermining efforts to prevent the spread of nuclear weapons.
Condoleezza Rice told the General Assembly at the beginning of its session on Saturday that the UN Security Council must deal effectively with Iran.
"Iran should return to negotiations with the EU3 [the UK, France and Germany] and abandon forever its plans for a nuclear weapons capability," she said.
"When diplomacy has been exhausted, the Security Council must become involved."
Jack Straw, the UK foreign secretary, told the BBC Mr Ahmadinejad's speech had been "disappointing and unhelpful".
French Foreign Minister Philippe Douste-Blazy said the possibility of referring Iran to the Security Council to face possible sanctions "remains on the agenda."
A senior US state department official speaking on the condition of anonymity, described Mr Ahmadinejad's speech as "very aggressive".
The US and the EU want Iran to give up any idea of having an enrichment capability.
Iran's leader said his country was being denied the technology to produce peaceful nuclear energy.
He said the offer to involve other countries and foreign companies in Iran's nuclear programme was a confidence-building measure.
In an apparent reference to the US, he condemned what he said were powerful interests bullying and misrepresenting Iran.
NUCLEAR FUEL CYCLE
Mined uranium ore is purified and reconstituted into solid form known as yellowcake
Yellowcake is converted into a gas by heating it to about 64C (147F)
Gas is fed through centrifuges, where its isotopes separate and process is repeated until uranium is enriched
Low-level enriched uranium is used for nuclear fuel
Highly enriched uranium can be used in nuclear weapons
Mr Ahmadinejad called on the General Assembly to work for complete nuclear disarmament, and to establish a nuclear-free zone in the Middle East.
In an interview with CNN, he did not rule out triggering an oil price rise if the UN imposed sanctions, saying that Iran "has the means to defend and obtain its rights."
UN Secretary General Kofi Annan opened Saturday's session by warning of the spread of nuclear weapons and terrorism without referring to any state by name.
"We face growing risks of proliferation and catastrophic terrorism, and the stakes are too high to continue down a dangerous path of diplomatic brinkmanship," he told the assembly's annual session.
Ms Rice advocated expanding the Security Council, an issue omitted from the reform package agreed at the UN World Summit, which ended on Friday.
Other issues not covered in detail at the summit may be raised at the session of the General Assembly, which brings together ministers from the UN's 191 member-states, and is due to last for 12 days.