"We are still hoping that with the negotiations we have had, we will arrive at a logical solution -- that they recognise our right to enrich uranium for peaceful purposes and accept us into the club," the president said in a news conference.

"After that there will be no problem" with the International Atomic Energy Agency (IAEA), he added.

On September 13, the IAEA is due to start a fresh round of discussions on Iran's suspect nuclear activities and examine the progress of inspections.

Under pressure from the IAEA, Iran agreed last year to suspend enriching uranium -- one of the most sensitive parts of the nuclear fuel cycle that can, depending on the level of enrichment, provide both fuel for power stations or for nuclear bombs.

But Iran has backed away from a pledge to also suspend its work on other parts of the cycle. It has resumed the assembly of centrifuges, begun uranium conversion and commenced the building of a heavy water reactor.

The three main European powers -- Britain, France and Germany -- have been pushing Iran to abandon its fuel cycle work altogether, even if such work is technically permitted under the nuclear Non-Proliferation Treaty (NPT).

Many sceptics say that by pushing on with the fuel cycle, Iran is seeking to acquire the "option" to develop the bomb at a later date. The United States and Israel say oil- and gas-rich Iran has no need for nuclear power and is only seeking weapons.

The US is pushing for Iran to be referred to the UN Security Council for possible sanctions.

Iran, however, has asserted it has the right to make its own nuclear fuel and not be reliant on foreign imports. Iran denies it is seeking nuclear weapons, describing them as "unIslamic".

IAEA inspectors have been working here since early 2003, and are still trying to establish the exact nature of Iran's nuclear activities.

Their latest report is due to be released next week. Since inspections began, the Vienna-based body has regularly complained of contradictions and omissions in Iran's reporting, even though Iran has agreed to sign up to tougher inspections.

"The Iranian case will not be closed in September," Khatami admitted, even though he said "a lot of problems have been solved and the case could be closed".

"But their attitude will determine ours in the future," he said of the IAEA's board of governors, adding that "the (next IAEA) report could be positive".

"We want to master nuclear technology, that is to say to be able to make uranium enriched to 3.5 percent," he told reporters, giving a figure far from the requirements of military usage.

"We don't want anything more. It is our right and nobody can deprive us of this technology," Khatami asserted, nevertheless promising "maximum cooperation" with the IAEA.

According to diplomats at IAEA headquarters in Vienna, the agency's governing board was unlikely to say in its report whether Iran's nuclear activities are of a military nature and would not recommend referring the case to the Security Council.

However, one source said the report would not deliver "a so-called clean bill of health, which would allow Iran to say that they should be taken off the agenda of the board of governors" of the agency.

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