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Last Updated: Wednesday, 8 March 2006, 15:35 GMT
Iran refuses to stop nuclear work
Mohamed ElBaradei at IAEA talks in Vienna
Mr ElBaradei has declined to say Iran's research is purely peaceful
Iran will continue its controversial nuclear research programme no matter what action the UN takes against it, an Iranian nuclear delegation has said.

It also composed a statement to the UN nuclear watchdog warning that the US could face unspecified "harm and pain" for its opposition to the programme.

Watchdog members are debating a report from its head on Iran's programme.

The US said Iran had enough nuclear material for 10 atomic bombs and it was time for the Security Council to act.

The council could begin talks on Iran as soon as next week. It has the power to impose sanctions, but it is not clear that all its key members would back punitive measures.

Oil threat

Javad Vaidi, Iran's top delegate to the UN watchdog - the International Atomic Energy Agency (IAEA) - said Tehran would continue small-scale enrichment despite the IAEA's opposition.

His delegation's statement to the watchdog said: "The United States may have the power to cause harm and pain but it is also susceptible to harm and pain.

The agency is not at this point in time in a position to conclude that there are no undeclared nuclear materials or activities in Iran
Leaked IAEA report

"So if the United States wishes to choose that path, let the ball roll."

The White House responded by saying that Iran's threat was provocative and further isolated Tehran.

Mr Vaidi also suggested Iran might at some point cut oil exports.

However, Iranian Oil Minister Kazem Vaziri-Hamaneh later said his country would not halt oil exports even if sanctions were called over the nuclear issue.

"[Economic sanctions] could affect the oil market and prices could go up but it will not affect our decision to continue our supply," he said.

Iran is the world's fourth largest oil exporter. Its economy relies heavily on selling oil.

Offer rejected

The IAEA is currently debating the long-awaited report by its head, Mohamed ElBaradei, into Tehran's nuclear programme.

The report said the watchdog could not confirm that Iran was not seeking nuclear weapons.

The US opposes allowing Iran to enrich any uranium, a key component for bomb-making.

President Mahmoud Ahmadinejad
Mahmoud Ahmadinejad has given no ground in negotiations

In an effort to head off Security Council intervention, Iran had suggested last week it might be allowed to enrich only small quantities of uranium for research purposes while importing most of its nuclear fuel from Russia.

But on a visit to Washington, Russian Foreign Minister Sergei Lavrov said Moscow's proposal for Iran to enrich uranium on Russian territory depended on Iran's full compliance with international demands.

The IAEA wants Iran to suspend uranium enrichment altogether.

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

Tehran says it wants to develop its nuclear sector only to produce energy for civilian purposes.

Three years of negotiations between Iran and the EU have brought no significant result, and Iran resumed enrichment in January after a two-year hiatus.

If the Security Council does take action, its first step is likely to be to issue a demand that Iran stop nuclear activities by a certain deadline.

It might then issue a further warning before beginning to consider sanctions.

President Ahmadinejad gave a defiant speech to supporters as the IAEA was meeting in Vienna.

"If we put up a firm resistance, they will be defeated and humiliated by the Iranian nation's will," he said.

What the report is expected to say

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