Top national security official Hassan Rowhani said on state television that a military strike would only push Iran's nuclear activities underground, and told Washington that the stand-off should be settled by dialogue.

"Our nuclear centres cannot be destroyed. Our nuclear technology comes from our scientists (and) we can transfer our nuclear workshops under mountains and carry out enrichment where no bomb or missile can be effective," said the cleric, adding he did not consider an attack as a "serious threat."

Rowhani, the secretary of Iran's Supreme National Security Council, insisted that Iran was "not looking for increased tensions with any country, even with the Americans."

"We are seeking to resolve our issues with the US. But they are blocking any chance of resolving the issues."

But his comments were followed by yet more criticism of the 26-year-old Islamic regime, with British Prime Minister Tony Blair calling Iran a state sponsor of terrorism and it to renounce its suspected pursuit of nuclear weapons.

"It certainly does sponsor terrorism. There's no doubt about that at all," Blair told a parliamentary committee, backing his close ally US President George W. Bush's view of Iran.

"Iran has now been given a set of obligations that it's got to fulfill," Blair said of its nuclear programme. "I hope they fulfill it."

Diplomats from Iran and Britain, France and Germany were to meet Tuesday in Geneva for a crucial round of talks in the EU-3's effort to secure guarantees Iran is not seeking nuclear weapons in exchange for diplomatic, security, trade and technology incentives.

The Europeans want Iran to totally dismantle its uranium enrichment programme to ensure that it cannot make weapons-grade material.

But Iran counters that it has the right, under the nuclear Non-Proliferation Treaty (NPT), to work on the nuclear fuel cycle -- something critics see as Iran exploiting a dangerous loophole in the treaty.

Iran says it only wants to make fuel for nuclear reactors, enabling it to generate atomic energy and free up more of its huge oil and gas reserves for export.

For the time being it has suspended all uranium enrichment-related activities to fulfill its part of a deal clinched in November with the Europeans.

But Rowhani repeated warnings that Iran's patience during negotiations on the issue was not finite.

"Our condition for a continuation of the talks is progress. Therefore, if the talks are not be progressing (by March 20), we are not obliged to continue," he said.

And Hossein Mousavian, a top Iranian negotiator, also said Tuesday's Geneva talks would be decisive.

"As of this meeting and the two next ones, the working groups should begin practical and serious discussions," he told state television.

"Our working groups will maybe have only one or two more meetings. Iran's decision is to continue the talks only if there is definitive, concrete and tangible progress."

On Sunday, US Vice President Dick Cheney said the United States backs the European diplomatic effort but has not "eliminated any alternative".

And US Secretary of State Condoleezza Rice said last week that military force against Tehran had not not been ruled out even though the "question is simply not on the agenda at this point."

"We are all concerned by the potential of a nuclear weapon in Iran. It would be a destabilising factor and we cannot let that happen," Rice said on a visit to Israel this week. "Iran is clearly a problem for the international system."

The UN nuclear watchdog the International Atomic Energy Agency (IAEA), which has been investigating Iran for two years, has found plenty of evidence pointing to suspicious activity but no "smoking gun" that proves Iran is seeking the bomb.

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