At a news conference, Khatami also strongly denied that Iran had received nuclear materials from North Korea and ridiculed US President George W. Bush's contention that tough US policies had made Iran a good nuclear citizen.

"Iran has never had weapons of mass destruction," the beleaguered reformist president told reporters at the opening of the World Economic Forum where he delivered a keynote address.

"We vehemently oppose the production and manufacturing of nuclear weapons and for this reason we have extensive, sincere and honest cooperation with the IAEA," the International Atomic Energy Agency.

Khatami said Iran reserved the right to the peaceful use of nuclear energy and said in response to a question that "I categorically deny the shipment of nuclear material by North Korea to Iran."

Tehran has been accused by Washington of seeking to develop nuclear weapons. Late last year it pledged to boost cooperation with the IAEA and to suspend uranium enrichment as a confidence-building measure.

But Khatami brushed off any suggestion that it changed its nuclear policy for fear of the United States after the Iraq war as suggested by Bush in his State of the Union speech Tuesday.

"I do not accept what he (Bush) said," Khatami told reporters, adding that Iran was already a participant in the Nuclear Non-Proliferation Treaty and other international efforts to curb the spread of weapons.

"Therefore, all the noise and fanfare of the United States did not have any impact on our decision," he said, attributing any progress to Tehran's dialogue with European countries instead.

Khatami also challenged Bush's claim of success in Washington's Middle East policies, citing its failure to capture Al-Qaeda chief Osama bin Laden or find weapons of mass destruction in Iraq.

He said that the US occupiers in Iraq were now in the position of trying to thwart a call by a Shiite cleric for direct elections to an interim government when the Americans hand over power in mid-year.

"It is up to you to judge if Mr. Bush is successful or not," Khatami said.

Despite speculation of the beginnings of a thaw in relations between Iran and the United States since the Iraq war, Khatami said Tehran had yet to see any signs of respect and a desire for an equal dialogue from Washington.

But he had noted a change in tone by the US administration that once wrote Iran off as a member of an "axis of evil."

"I hope the changes we have witnessed in tone used by the United States will not be a tactical ploy but a real strategic change in policies and attitudes."

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