"I don't think that a strike on Iranian nuclear facilities is on the cards," Annan said in a reply to questions on the possibility of action led by the United States.

"I also don't think there is any need also to take physical action against Iran. It would be unwise, very unwise," the UN chief said at the end of a four-day visit to India.

The US government earlier this month promised economic and technological incentives to Iran in a bid to help Britain, France and Germany persuade it to abandon a suspected bid to build nuclear weapons.

Washington also 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.

Annan said Tehran, which rejects the US charges, was engaged in earnest negotiations with the three European countries.

"Iran is cooperating with Germany, France and the United Kingdom fairly well and serious discussions are on which will produce results," the UN chief told a news conference.

Iranian President Mohammad Khatami has asserted that no incentives would be enough to convince his country to renounce its nuclear program, but has pledged Tehran would make "every effort" to convince the world it was not seeking atomic weapons.

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