But the surprise winner of Iran's second-round presidential election also said Tehran would continue nuclear talks with the European Union and show moderation in its foreign and domestic policy.

"Moderation will be the main policy of the government of 70 million people," the ultra-conservative Ahmadinejad told his first news conference since winning the presidency. "There will be no place for extremism," he said.

"This government will be a government of friendship and compassion. This government will be a government of justice and fairness, in the service of the people... whatever views they have."

But the 49-year-old mayor of Tehran said Iran does "not really need" to restore relations with the United States, which were broken off a quarter of a century ago after the Islamic revolution.

"Iran is on a path of progress and elevation, and does not really need the United States on this path," he said, but added: "We can work with any country in the world that does not show animosity to Iran."

Tehran and Washington cut off ties a quarter of a century ago, and a possible resumption of dialogue was floated by his defeated presidential rival, the moderate conservative Akbar Hashemi Rafsanjani.

Ahmadinejad also moved to make reassuring noises about Iran's nuclear policy, which has been the subject of international concern since his shock win on Friday.

"Today we can say that nuclear technology is our right, to be used for peaceful purposes," he said.

He pledged that negotiations with the European Union aimed at showing that Iran's nuclear programme is peaceful would continue, but he also called on Europe to prove its cooperation.

"Based on the national interests of the Islamic republic of Iran, we will continue negotiations. But trust must be mutual," he told a news conference.

European leaders urged Ahmadinejad, who takes power in August, to move quickly and prove that Iran's nuclear programme was peaceful. The Iranian foreign ministry said the election would strengthen its position in negotiations.

"I hope that under Mr Ahmadinejad's presidency, Iran will take early steps to address international concerns about its nuclear programme," British Foreign Secretary Jack Straw said in remarks echoed by his counterparts in Paris and Berlin.

He also sought reassure investors in Iran's fledgling stock market, which he said would grow stronger. "It will grow bigger with more clarification so that people put their assets with trust into the bourse market."

Ahmadinejad would try to increase both foreign and domestic investment in the Islamic republic by streamlining bureaucratic procedures.

"We will expand domestic and foreign investment in Iran. There are many bureaucratic barriers which have reduced investment security in Iran," he said.

"I will ask foreign and domestic investors to come, especially Iranians abroad."

Ahmadinejad trounced Rafsanjani, a veteran of Iran's theocracy, in Friday's second-round run-off with 61.69 percent of the vote.

A deeply religious conservative, Ahmadinejad paid homage at the shrine of Iran's revolutionary leader Ayatollah Ruhollah Khomeini as one of his first acts since being elected.

Although he will be the first non-cleric to hold the presidency for 21 years, opponents have accused him of seeking to impose hardline religious puritanism on Iran and enforce strict dress codes and segregation for women.

The mayor's team has vehemently denied he is an extremist and Ahmadinejad has said he wants to take Iran to an unprecedented a level of freedom. Foes point to his record as mayor of Tehran, where he clamped down on the city's once thriving cultural centres.

A top aide said Ahmadinejad planned to offer Iranians free shares in state-owned enterprises and slash interest rates for corporate investment to single digits.

Manouchehr Khoshchehreh sought to play down the importance of recent price swings on the Tehran bourse after some investors said they were concerned by a lack of a coherent economic programme to grapple with Iran's chronic inflation and unemployment.

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