"It is necessary to act with reason with the enemy and not provoke it. Extremism does not do people any good," Montazeri said, referring to Ahmadinejad's rhetoric against the United States.

"We say death to America, but the United States is a power with important means," Montazeri was quoted as saying in a meeting with a group of liberal opposition groups.

"Every day, it is repeated that a certain thing is our undeniable right. I agree it is your right. But one can obtain a right without creating problems and providing pretexts for others" to put pressure on Iran, he said.

Iran says it has an "undeniable" right to nuclear technology, defying the international community which has called on the Islamic republic to freeze uranium enrichment.

Ahmadinejad has come under fire by both conservatives and reformists over his economic policies and handling of the nuclear issue after the UN Security Council passed a resolution in December imposing sanctions on Iran for its refusal to suspend enrichment.

Montazeri also criticised Ahmadinejad for his government's inability to control inflation, saying "one cannot run a country with slogans."

Ahmadinejad swept to power in a June 2005 election on the back of promises to "bring oil money on to people's tables" and remove the gap between rich and poor.

Critical voices have risen against Ahmadinejad after his allies were defeated in December 15 municipal election and Assembly of Experts polls.

On Tuesday a moderate MP hit out at the president for what he said were "acts of provocation and adventurism, which are incompatible with our foreign policy.

"The attitude adopted by the president is not in our national interests," Akbar Alami said during an open parliament session broadcast live on state radio.

Ahmadinejad has vowed not to bow to any UN resolutions and pledged to press on with the nuclear programme.

There has been speculation that Washington may be planning a military strike against Iran's nuclear programme, which Tehran insists is only designed for peaceful energy ends but the West fears to be a cover for weapons development.

Alami also denounced a Holocaust conference held by the foreign ministry in December that gathered notorious revisionists in Tehran who questioned the mass slaughter of Jews in World War II by Nazi Germany.

earlier related report
Iran dismisses nuclear sanctions as ineffective
Tehran, Jan 23 (AFP) Jan 23 - Iran dismissed UN sanctions imposed on its nuclear programme as ineffective on Tuesday, and vowed to continue its controversial nuclear work.

"Such sanctions will have no effect on us," government spokesman Gholam Hossein Elham Elham told reporters a day after the European Union called for the full implementation of UN sanctions imposed on Iran for its refusal to suspend uranium enrichment.

Uranium enrichment lies at the focus of fears over Tehran's nuclear ambitions, as the process can make the fissile core of an atom bomb as well as nuclear fuel.

Elham said that Iran would press ahead with its nuclear fuel cycle work despite the sanctions.

"This sanction does not affect our national will to complete the fuel cycle in order to meet industrial needs and the development of the country, which has started and will continue," he said.

Iranian foreign ministry spokesman Mohammad Ali Hosseini advised the European Union to distance itself from the United States, saying attempts to apply sanctions are "irrational".

"It is deplorable that the European Union bases its certain irrational decisions on the unjust and unlawful resolution 1737.

"The European Union should not link its vital interests in the region with America's provocative approaches," he said in an statement.

In a new show of defiance Iran said on Monday it would block 38 International Atomic Energy Agency (IAEA) inspectors from entering the country in reprisal for the sanctions.

The Vienna-based IAEA said it was discussing the issue with Iran, but added that it could continue monitoring its nuclear facilities even without the presence of inspectors.

Elham said on Tuesday, however, that Iran would "continue working with the IAEA".

On December 23 the UN Security Council passed resolution 1737 imposing sanctions on Iran for its repeated refusal to cooperate fully with the UN atomic energy watchdog or to suspend uranium enrichment.

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