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Last Updated: Saturday, 1 October 2005, 18:36 GMT 19:36 UK
Iran denies report of oil threat
A general view of Iran's first nuclear reactor, being built in Bushehr
Iran faces the threat of sanctions if it does not halt its nuclear plans
Iran's president has denied reports he threatened to withhold oil sales if Tehran was referred to the UN Security Council over its nuclear activities.

The UN nuclear watchdog agency passed a resolution a week ago paving the way for Iran to be reported to the council.

President Mahmoud Ahmadinejad has said he did not give an interview to a Dubai newspaper which reported him as issuing the warning on oil sales.

However, the Khaleej Times newspaper is standing by its freelance reporter.

The editor, Prem Chandran, said the reporter has now clarified that on several occasions when she spoke to the president she presented herself as a reporter with the US-based Arab News, and not as a Khaleej Times reporter.

In her report, journalist Nihal Kamel quoted Mahmoud Ahmadinejad as saying: "We will respond by many ways, for example by holding back on oil sales."

Western powers are concerned that Iran's uranium enrichment programme could be used to build weapons.

Iran insists its nuclear programme is purely peaceful, and designed to meet its energy needs.

IAEA resolution

The International Atomic Energy Agency (IAEA) approved a resolution last Saturday paving the way for referral to the Security Council, which could impose sanctions.

The resolution was submitted by Britain, France and Germany. Twelve members of the agency's board abstained.

Tehran responded with defiance, reaffirming plans to resume uranium enrichment and threatening to prevent snap inspections of its facilities by nuclear inspectors.

Tehran recently restarted work on the early stages of uranium enrichment.

Such work had been suspended since November 2004 while talks were held with the UK, France and Germany about its long-term nuclear plans.

Iran hid an uranium enrichment programme for 18 years until its activities were exposed in 2002.

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