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Last Updated: Tuesday, 7 March 2006, 17:47 GMT
Iran demands nuclear compensation
President Mahmoud Ahmadinejad
Mahmoud Ahmadinejad insists Iran has a right to run nuclear research
Iran's President Mahmoud Ahmadinejad says the West should compensate Iran for its past suspension of nuclear research as a way of building trust.

It comes as the International Atomic Energy Agency (IAEA) is holding talks in Vienna that could pave the way to UN Security Council action against Iran.

A foreign ministry spokesman said Iran was ready to compromise - but only if allowed to run some nuclear research.

But the IAEA - and the US - say only a full suspension is acceptable.

Western powers believe Iran wants to develop nuclear arms, a claim it denies.

US Secretary of State Condoleezza Rice on Tuesday reaffirmed the US position that any nuclear enrichment on Iranian soil is unacceptable.

There is no compromise new Russian proposal
Sergei Lavrov
Russian foreign minister

Speaking after meeting Ms Rice in Washington, Russian Foreign Minister Sergei Lavrov insisted all Russia's recent negotiations had been focused on trying to persuade Tehran to comply with IAEA demands.

"There is no compromise new Russian proposal," he said.

Chinese Foreign Minister Li Zhaoxing has urged Iran to co-operate with the IAEA and stressed that there is still room for negotiation.

Confidence-building measure

Mr Ahmadinejad has said that Tehran will review its previous policies if it is reported to the UN Security Council.

A senior military commander warned on Monday that the Iranian military would turn the country into a killing field for any enemy aggressor.

The BBC's Frances Harrison in Tehran says there is now more talk from Iranian officials of preparing people psychologically for confrontation with the West.

Mohamed ElBaradei at IAEA talks in Vienna
Mohamed ElBaradei says he is hopeful a deal can still be reached

But Iranian television has accused Western media of exaggerating the dispute over Iran's nuclear ambitions, our correspondent says.

Speaking in Tehran on Tuesday, Mr Ahmadinejad said the IAEA "has to compensate Iran for causing damage to the development of its science, technology and economy".

However, he failed to mention that Iran's suspension of uranium enrichment two years ago - the basis of his call for compensation - had been voluntary, our correspondent adds.

Later, Iran's foreign ministry spokesman Hamid Reza Asefi said Tehran was ready to compromise but only if it was allowed to continue its small-scale nuclear enrichment programme.

Tehran was willing to suspend full-scale nuclear enrichment for a period as a trust-building measure, he told the BBC.

It insists it has the right to develop its nuclear sector to produce energy for civilian purposes.

Three years of negotiations between Iran and the EU have brought no significant result.

Iran resumed enrichment in January after a two-year hiatus.

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