"We have said clearly that we will not apply the second part of the resolution concerning the total suspension of enrichment," Iran's chief nuclear negotiator Hassan Rowhani told state television.

He was referring to a resolution passed on September 18 by the board of the International Atomic Energy Agency (IAEA) calling on Iran to "immediately" widen a suspension of enrichment to include all uranium enrichment-related activities -- such as making centrifuges, converting yellowcake into UF6 feed gas, and constructing a heavy water reactor.

"We have suspended enrichment voluntarily and we will not accept any constraints," Rowhani added. "To sort out this case, there are two possibilities: Either we find a political solution and close the case (at the or we move towards confrontation. We are ready for both."

Iran, facing a November 25 deadline, risks being referred to the UN Security Council if it fails to comply.

But another official said Iran was continuing to convert uranium.

"Out of the 37 tonnes of yellowcake, a few tonnes has been used and converted. This is an experimental and testing process," Hossein Mousavian told AFP.

He was referring to 37 tonnes of uranium yellowcake which Iran had previously said it would be converting into uranium hexoflouride (UF6), the gas that is fed into centrifuges to make enriched uranium.

Mousavian, a deputy to Rowhani, nevertheless asserted that the conversion activities were under IAEA supervision.

"The process of testing has from the beginning been under 100 percent supervision and control of the IAEA, in the framework of safeguards agreements, the additional protocol and IAEA rules and regulations, and every milligram of this testing process is controlled by the IAEA," he said.

"The testing process is continuing."

In Vienna, IAEA spokeswoman Melissa Fleming said the UN agency would not comment on Iranian claims to have already made large amounts of UF6 gas.

Fleming said the conversion facility at Isfahan "is under IAEA safeguards but that said we are not able to provide any details on their progress in producing UF6 at this time."

And another official said Iran could resume the actual process of enriching uranium within months.

Depending on the level of purification, enriched uranium can be used either as fuel for a civilian reactor or as the explosive core of a nuclear bomb. Iran insists it only wants to generate electricity.

"Why should we not resume enrichment?" asked Kazem Jalali, spokesman for the Iranian parliament's foreign policy and national security commission, after deputies in the hardline-controlled parliament on Tuesday began a legislative drive to force a resumption of enrichment.

"Where in the NPT (Nuclear Non-Proliferation Treaty) and in the additional protocol does it say that enrichment is forbidden and therefore it should be stopped? It is our natural right," he continued.

But many analysts say the parliament's move is more a case of posturing and a means of raising the stakes in the standoff with the IAEA. Perhaps tellingly, the bill was not prioritised for immediate debate in the assembly.

"This bill is an ordinary bill, and it will be dealt with when it is its turn, and I think within a month or 40 days it will be the turn of this bill to be read in the Majlis," said Jalali, a 37-year-old deputy from the central city of Shahrud.

"I guess that it will be approved before November 25. After the bill is ratified the government has to implement it. I think it would be within months," he said when asked when enrichment could resume.

Speaking in Khartoum, President Mohammad Khatami meanwhile repeated assertions that Iran was not interested in a nuclear bomb.

"Acting in conformity with our religious values and our commitment to the treaty banning proliferation of nuclear weapons, we are not going to produce nuclear weapons," Khatami told reporters at the end of a three-day visit to Sudan.

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