"We do not see any legal basis for this demand," Ali Asghar Soltanieh told CNN television.

"There is no limitation or restriction" on peaceful uses of nuclear power in International Atomic Energy Agency or nuclear Non Proliferation Treaty rules, he told CNN's "Late Edition."

"There is no provision in the IAEA statute also and NPT for requesting a country to stop or suspend enrichment activities," the ambassador to the IAEA said from Vienna.

"The only thing is that the IAEA has to verify and control the activities to make sure that there is no diversion" of fissile material to use in weapons.

He called the most recent report by IAEA chief Mohamed ElBaradei "a document proving our assertion that all activities have been for peaceful purposes and there is no evidence of diversion to nuclear material."

UN Secretary General Kofi Annan, on a visit to Tehran to meet President Mahmoud Ahmadinejad, said he was assured that Iran was "prepared to negotiate and find a way out of this crisis."

He added, however, that Ahmadinejad had also said that "Iran does not accept a suspension (of uranium enrichment) before negotiations".

Iran has defied Western demands to suspend uranium enrichment, a process that can be used to make nuclear fuel and, in highly extended form, the core of an atomic bomb.

Iran's rejection of a UN deadline, which expired Thursday to halt enrichment, has left Tehran facing a push by the United States for the Security Council to impose sanctions.

The UN chief told reporters that he had had a "very good discussion" with Ahmadinejad on the nuclear issue which he would discuss with the five permanent Security Council members plus Germany which offered Iran an incentives package to suspend uranium enrichment.

The United States accuses Iran of seeking nuclear weapons, a charge fiercely denied by Tehran, which insists that its nuclear program is solely aimed at providing civilian energy.

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