Speaking on state television, President Mohammad Khatami pledged that any nuclear activities that may resume -- despite a deal with Britain, France and Germany -- would be "still very far away" from the highly-sensitive process of enriching uranium.

"Our desire is to negotiate and to find a compromise," he emphasised, in comments that appeared to back away from the more defiant tone struck by the clerical regime the previous day.

Top Iranian nuclear negotiator Hassan Rowhani also emphasised that "Iran will maintain the suspension of the key enrichment activities but could, if it decided to, resume some of its activities."

Iran insists it only wants to enrich uranium to make fuel for an atomic energy programme, but its possession of the entire nuclear fuel cycle could also hand it the capacity to produce nuclear weapons.

On Tuesday foreign ministry spokesman Hamid Reza Asefi had said that Iran, frustrated by the progress of talks with the EU-3, would "very certainly" resume some nuclear work -- comments that overshadowed a non-proliferation conference at the United Nations.

European diplomats close to the talks warned that such a step would constitute a violation of the suspension agreement and lead the EU-3 to side with the United States and refer Iran to the UN Security Council for possible sanctions.

"Iran cannot have it both ways. If it wants to keep the negotiations going, it must maintain the suspension. We have made it very clear that any breaking of the agreement means that the talks are over, and Iran is aware of the consequences," a European diplomat told AFP.

Iran agreed in November last year to suspend its fuel cycle work -- the focus of international fears the country may be seeking the bomb -- and open talks with Britain, France and Germany.

But the clerical regime has since shown impatience over the progress of the negotiations, in which the Europeans are offering a package of incentives in return for "objective guarantees" from Iran that it will not develop the bomb.

Rowhani said that "despite the progress in the talks, it appears the three European countries are trying to drag out the negotiations. This is unacceptable."

"A total halt of enrichment or a long-term suspension is not acceptable," said Khatami. "We have said this from the start and we say it again today."

The EU-Iran talks remain deadlocked. The Europeans are demanding that Iran halt enrichment activities altogether, seen as the best possible "objective guarantee," and the Iranian side is demanding the resumption of relatively low-scale enrichment.

Iran has been subjected to over two years of investigations by the International Atomic Energy Agency (IAEA), the UN's nuclear watchdog, after it emerged the country had been covering up its activities for 18 years.

Since then, the IAEA has uncovered plenty of activity deemed suspicious -- including black market acquisitions of sensitive dual-use technology -- but no "smoking gun" that proves a weapons drive.

As a signatory of the nuclear Non-Proliferation Treaty (NPT), the country insists it has the "right" to peaceful nuclear technology. The US says Iran is merely "cynically" exploiting a loophole in the treaty.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.