But a day after the European Union 3 - Britain, France and Germany - announced Tuesday they had called off talks scheduled for Aug. 31 with Iran, the country's new President Mahmoud Ahmadinejad talked again of proposals that Iran would offer on the nuclear dispute. He said Iran was still willing to continue nuclear negotiations with the EU.

"Our policy is transparent and clear: We are seeking the nation's lawful rights within the framework of international laws and we will defend these rights seriously," he told reporters at the end of parliamentary sessions that have been held since Sunday to debate a vote of confidence to his proposed Cabinet.

The newly appointed chief nuclear negotiator, Ali Larijani - a conservative former head of state broadcasting - had also hinted at the so-called innovative approaches and "a set of fresh ideas" meant to resolve the dispute.

Commenting on the cancellation of meeting with Iran, French Foreign Ministry spokesman Jean-Baptiste Mattei said the decision did not mean "that there will not be any contacts with the Iranians."

A British Foreign Office spokesman noted "there is no basis for negotiations until Iran responds to the IAEA board's last resolution."

The resolution adopted earlier this month urged the country to halt its recently resumed uranium conversion activities - a process that provides the seed material for enrichment.

Concurrent with the new developments, an independent investigation by some experts affiliated with the IAEA cleared Tehran of any wrongdoing over traces of bomb-grade uranium found two years ago in one of the country's nuclear facilities.

The report said the traces of enriched uranium came from contaminated Pakistani equipment, not Iranian activities. The findings are seen by Iranian officials as a vindication of the country's position.

But the United States dismissed the report, saying there were other ways Iran could be building nuclear weapons. A U.S. State Department spokesman said the report did nothing to reduce "unresolved concerns" at Iran's nuclear program.

Iran resumed work on its uranium processing plant in the central city of Isfahan two weeks ago and has indicated it intends to restart its main enrichment facility in Natanz soon.

The Islamic republic says it has lost confidence in the negotiations with the EU3 and insists its atomic program is peaceful in nature and in line with the non-proliferation treaty obligations. Therefore, analysts say, it sees no reason why its facilities should be under IAEA lock and key.

Criticizing the European cancellation of the talks, Iran's nuclear spokesman Hussein Musavian said Tuesday Iran would not negotiate with the EU beyond the terms of the Paris-Tehran accord.

"The European proposal is a violation of the Paris agreement and their unwillingness to negotiate shows that Europe wants the talks to go beyond the Paris pact and the Tehran declaration which Iran will not accept," Mehr News Agency quoted him as saying.

Musavian stressed Iran's decision to resume uranium ore conversion at Isfahan was irreversible.

"We openly informed Europe in Geneva that Iran would reject the EU proposal and restart work at Isfahan if the plan did not include the country's right to enrichment," he said, adding, Iran has kept the Natanz enrichment plant in suspension and is not against holding talks with Europe.

Iranian officials maintain the agreements already reached with the Europeans have called for a voluntary, non-obligatory and non-legal suspension by Iran.

Iran pledged in Paris last year to suspend uranium enrichment-related activities as long as talks with the EU3 were under way.

Earlier this month, the three offered a package of economic, technical and political incentives in exchange for a permanent suspension of Iranian efforts to make its own nuclear fuel. Iran rejected the deal, saying they failed to recognize the Islamic republic's rights under the NPT to make nuclear fuel.

Low-level enriched uranium can be used as fuel for civilian reactors, but the same fuel in highly refined form can be the raw material for atomic bombs.

The EU and the United States suspect Iran of secretly trying to build nuclear weapons. Iran says it wants nuclear technology only to generate electricity.

"The objective guarantees were basically meant to assure that Iran's activities in mastering a complete nuclear fuel cycle would not be diverted to a nuclear weapons program," Mousavian said. "The Isfahan Uranium Conversion Facility is not at all related to nuclear weapons production but Iran is ready to negotiate on objective guarantees concerning Natanz."

Commenting Wednesday, the English-language daily Iran News referred to Iran's nuclear program as "a source of immense national pride for the Iranian government and people" whose "dismantling as the West has been calling for is out of the question."

"From strategic point of view, the Islamic republic has already made the decision to develop its nuclear industry at all cost," said the daily in an editorial.

It further referred to Tehran's nuclear program as "one of the absolutely unbreachable red lines of the system" that should be recognized by the U.S., the European Union, the United Nations, the IAEA and the broader international community.

The editorial also recommended the Iranian negotiating team to "refrain from extremist actions which could scuttle the chances of a negotiated settlement, provided the West - and in particular the U.S. - reverses course in its policy of threats and accusations."

The paper optimistically said in conclusion that an "amicable solution is still within reach but not before Washington drops its belligerent policy of threatening Iran with Security Council referral, punitive sanctions, airstrikes, etc."

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