"We will not give up our nuclear technology in return for any incentives. We will not accept any incentives. And we will make every effort to convince the world that what we have is peaceful," Khatami told a news conference.

When asked to respond to US demands that Iran abandon its bid to master the fuel cycle and enrich uranium, Khatami replied: "Then I ask (US President George W.) Bush to stop his incorrect policies against Iran and the Middle East."

"Part of the crisis in the Middle East comes form the United States. If the US really wants to put a stop to atomic weapons, it should go to the countries that are not members of the NPT (nuclear Non-Proliferation Treaty) and who do not abide by international regulations." Khatami said.

"The most dangerous of them is Israel."

"We are also worried about nuclear weapons. We are in no way seeking atomic weapons because it is contrary to our beliefs," he insisted.

Iran is in the midst of negotiations with Britain, France and Germany, who have been trying to secure "objective guarantees" that the clerical regime will not use its atomic energy programme to acquire nuclear weapons.

Ideally, the European Union would like Iran permanently to give up uranium enrichment, which makes what can be fuel for civilian nuclear reactors but also the explosive core of atomic bombs.

In exchange they are offering a package of trade, security and technology benefits to the Islamic republic.

But Khatami said "we have the right to have this technology", and said his country could not be forced to rely on nuclear fuel from overseas, only to see supplies cut.

"We have given objective guarantees and Europe has to give us firm guarantees regarding our security and development," said the president, in Isfahan to close a one-day OPEC ministerial meeting.

Iran has maintained a freeze of its enrichment activities since the International Atomic Energy Agency (IAEA), the UN's nuclear watchdog, uncovered close to two decades of covert activity.

Earlier Wednesday, Iran's top nuclear negotiator Hassan Rowhani said Iran has definitively and officially told Europeans that Iran will never accept a permanent halt to its enrichment programme.

"Iran's negotiating team has openly told Europeans Iran will not accept a permanent suspension of uranium enrichment and this is Iran's definitive and official position," Rowhani said.

The two sides are to convene on March 23 for a high-level steering committee meeting, and Tehran hopes to see an agreement on "a formula that recognises the right of Iran to continue enrichment and lifts the concerns over the Iranian nuclear programme", Iran's Foreign Minister Kamal Kahrazi told a press conference on Tuesday.

The US government announced Friday that it would offer some economic and technological incentives to Iran, in a bid to help the EU three and a move described by IAEA chief Mohamed ElBaradei Wednesday as "very welcome".

It agreed to drop its objection to Iran's application to join the World Trade Organization, and said it would consider on a case-by-case basis the licensing of spare parts for Iranian civilian aircraft, in particular from Europe to Iran.

Washington's new offer to Iran got a cold reception in Tehran, but the Europeans have now joined the United States in threatening to take the matter before the UN Security Council if Iran fails to ease international concerns.

"Iran is playing by the book," ElBaradei said in London. "They are implementing their legal obligations. But in light of 20 years of undeclared program I'd like to see more than just playing by the book; I'd like to see proactive transparency."

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