"Iran still has an opportunity," State Department spokesman Sean McCormack told AFP, adding that Tehran should communicate its official response to the international offer through European Union foreign policy chief Javier Solana.

Iran earlier insisted it would not freeze uranium enrichment, and warned it could even expand its nuclear programme which the West fears is a cover for efforts to build a nuclear bomb.

"Our activities respect the Non-Proliferation Treaty... so we will not accept the suspension (of uranium enrichment)," Iranian nuclear chief Ali Larijani earlier told reporters, in the first formal reaction to the July 31 UN Security Council resolution requiring Iran to halt enrichment by August 31 or face sanctions.

"They should know that such resolutions will not affect our determination. We will pursue the nuclear rights of Iranians which are enshrined in the NPT."

"This resolution has no legal credibility and it negates the purpose of the (International Atomic Energy) Agency," Larijani said.

The resolution was pushed through after Iran ignored a previous non-binding deadline and failed to respond to an international offer of a package of incentives in exchange for a moratorium on nuclear fuel work.

Iran, OPEC's second largest oil exporter, insists it wants to enrich uranium only to make reactor fuel for power stations, but there is widespread suspicion the country wants the capacity to make weapons-grade uranium.

Larijani warned world powers against imposing sanctions, suggesting that Iran could use oil as a weapon.

But he also said Iran was still studying the package of incentives offered by Britain, China, France, Germany, Russia and the United States on June 6, saying it "had the potential to resolve the nuclear issues".

The package, handed to Tehran on June 6, offers trade, technology, diplomatic and other incentives as well as multilateral talks -- also involving the United States -- if Iran agrees to freeze enrichment.

Larijani said Iran would respond to the offer by August 22, but that the UN resolution had "badly affected the opportunity (represented by the offer) and our attitude".

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