Iran defiant after atomic case goes back to UN

But President Bush kept up the pressure saying Tehran could not "wait us out" and Germany warned "other steps" would be necessary if Tehran did not respond to a package to rein in its atomic work.

Five permanent Security Council members, the United States, France, Britain, Russia, China, plus Germany backed a package calling for Iran to halt uranium enrichment in return for economic and diplomatic incentives. But they asked the council to intervene after Tehran failed to reply.

"Our answer to the P5+1 package is clear, the Iranian nation abides by international laws and regulations but will not abandon its obvious right to obtain nuclear technology," Iranian President Mahmoud Ahmadinejad was quoted as saying by state TV.

The West says Iran wants to enrich uranium to produce atomic bombs, a charge Iran denies. It has refused to halt the work.

"We are trying to investigate the proposed package positively," Ahmadinejad said in comments carried by Iran's Fars news agency, but repeated that Iran would give its final reply by August 22 despite pressure for a swifter response.

France said world powers agreed on a plan to draw up a U.N. resolution "in a few days" telling Iran to stop sensitive atomic work. If it refused by mid-August, another resolution would be proposed under an article of the U.N. charter that allows for economic sanctions but not military force.

Russia and China, which both have commercial interests in Iran, are not expected to back tough measures against Iran. Russian Foreign Minister Sergei Lavrov said the major powers were not yet considering imposing sanctions on Iran.

Lavrov has said using force was "absolutely excluded".

Analysts say Iran, the world's fourth largest oil exporter, may calculate such divisions mean it is only likely to face modest steps such as travel bans on officials or asset freezes - measures they say Iran may believe it can weather.

The West says Iran is miscalculating if this is its view.

"The Iranians must realize that they can't wait us out," Bush said after meeting German Chancellor Angela Merkel, who warned of "other steps" if Iran did not reply.

The spokesman for British Prime Minister Tony Blair said Iran was "making a mistake" if it believed there was a division.

A Vienna-based diplomat said Iran's chief nuclear negotiator irked the EU foreign policy chief at recent talks by "beating around the bush", asking whether the West only sought "regime change" in Tehran, without even mentioning the incentives offer.

"There was no clear sign Iran is interested to open negotiations," he said, adding that the six powers were now considering publishing the incentives offer, until now only revealed in part by leaks, to pressure Tehran.

Ahmadinejad said Iran was ready for talks but also repeated threats that it might, if pushed, review cooperation with the U.N. watchdog, the International Atomic Energy Agency (IAEA), and review adherence to the nuclear Non-Proliferation Treaty.

Iran has halted short-notice inspections by the IAEA, although the U.N. inspectors still routinely visit Iran.

Ahmadinejad said Washington, which severed ties with Tehran after the 1979 Islamic revolution, was trying stir up a dispute.

"If some are after creating problems, they should know that any problem created for Iran in the region will harm interests of everyone," he said in one of several recent speeches.

Supreme Leader Ayatollah Ali Khamenei, not the president, is the highest authority in Iran's government system. But Ahmadinejad said he was voicing state policy in his speeches.