"Iran has observed international regulations and depriving Iran of nuclear technology and energy for peaceful purposes is impossible," Larijani told Schroeder during a meeting in Tehran, according to state broadcaster.

The latest remarks by Larijani, a former nuclear negotiator for Iran, came after the International Atomic Energy Agency on Thursday said Iran is continuing to enrich uranium, potentially a stage in making an atomic bomb, but has slowed down the expansion of its enrichment activities.

Tehran and Western powers are at loggerheads over Iran's controversial nuclear programme. The West suspects the programme is aimed at acquiring atomic weapons, a charge Tehran denies.

Schroeder, who is on an unofficial visit to Iran, met top officials of the Islamic republic, including hardline President Mahmoud Ahmadinejad.

During his meeting with Larijani, the former chancellor praised Iran's "positive and constructive role in Afghanistan".

Later during a meeting with former Iranian president Akber Hashemi Rafsanjani, he said that without "US and Iran cooperating" current regional issues will not be solved.

Schroeder also said it was wrong to have ignored and isolated Palestinian Islamist militant group, Hamas, over the past years while solving the regional issues.

"It is necessary to have this group join regional solutions," he said.

In January, Israel fought a 22-day war with the Islamist movement in the Gaza Strip.

Israel has long accused Iran of arming the Islamists in Gaza, a claim Tehran denies even though it says it offers moral support to Hamas.

Iran and in particular Ahmadinejad have repeatedly launched tirades against Israel and even termed the Holocaust as a "myth", much to the fury of the global powers.

In a speech earlier on Saturday at the Iranian Chamber of Commerce and Industry, Schroeder criticised Ahmadinejad for doubting the Holocaust.

The Holocaust is a "historical fact" and there is no sense in denying such an "unparalleled crime," he said.

Borna news agency, an affiliate of the state-run IRNA news agency, said Schroeder criticised Ahmadinejad who has stirred global outrage with his anti-Israel stance.

The report said Schroeder emphasised that if Iran wants to be recognised as a regional and international power, it should assume some responsibility and respect international law.

But the former German leader also said Iran has an opportunity to ease tensions with the West.

"With the new US administration there is a chance of having a multilateral approach, not only with the Islamic world but with everybody... That is a good opportunity for Iran," Mehr news agency quoted him as saying in his speech.

Ahmadinejad too told Schroeder that the current issues "should be resolved with global cooperation and harmony," the state broadcaster said.

During his presidential campaign, Obama called for dialogue with Iran. That was a clear shift from previous president George W. Bush, who rejected talks unless Iran halted uranium enrichment, which makes fuel for nuclear power plants but can also be used for the core of an atomic bomb.

Last month, Obama said "if countries like Iran are willing to unclench their fists, they will find an extended hand from us."

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