"The Islamic Republic of Iran will not bend to these pressures," he said, referring to proposals drawn up by Britain, France and Germany, and backed by the United States, Russia and China, in a bid to defuse the nuclear crisis.

"The continuation of this scientific progress is its fundamental and basic right," Khamenei said, quoted by state television in a meeting with staff of the Iranian Nuclear Energy Organization.

The big powers have urged Tehran to suspend its controversial uranium enrichment program.

They have offered an incentives package, including the lifting of some US trade sanctions and international support for the "building of new light water reactors in Iran," according to a copy of the proposal shown to AFP.

The world powers - which presented the offer of trade, security and technology benefits to Tehran on June 6 - are holding off on threatening sanctions until they receive a response from Iran.

"Iranian youths achieving the nuclear technology is a historical milestone, and this move should be pursued in other (scientific) fields," he added, after a briefing on Iran's nuclear breakthroughs.

"The main key of power, progress and happiness of a nation is science and technology. A nation that is determined on building its own fate must find this key," he said.

Khamenei's defiant remarks came as the United States urged Iran to "make the best choice" by accepting the benefits in return for guarantees it will not develop atomic weapons.

Gregory Schulte, US ambassador to the International Atomic Energy Agency, called on "Iran to cooperate with the IAEA," which has been investigating Tehran for more than three years.

The UN nuclear watchdog has been meeting in Vienna to discuss Tehran's disputed program.

IAEA board members were reviewing two reports from agency chief Mohamed ElBaradei, one from April 28 and the other from last week, which show Iran has ignored calls to halt uranium enrichment.

The process can be used to make reactor fuel to generate nuclear power, but can also produce atom bomb material.

Iran's Foreign Minister Manouchehr Mottaki earlier Thursday voiced optimism over the proposals by world powers and the prospect of negotiations on the nuclear file.

"They have submitted their package and asked about our opinion, without the 'take-it-or-leave-it' attitude they showed previously on the last year's package. This is a positive step forward," he said on state television.

"We are optimistic about the current atmosphere," Mottaki said. "As soon as we finish studying the package, we will bring up our points and opinions and start talks."

But in Vienna, Iran's ambassador to the IAEA, Ali Asghar Soltanieh, told the meeting that the international community's "carrot-and-stick policy has always been counterproductive ...

"Humiliation and the use of language of threat of referring the nuclear dossier to the UN Security Council ... have had serious impact on mutual trust and confidence on parties involved" in negotiations, he warned.

Diplomats from IAEA's 35-nation board of governors told AFP they wanted to avoid conflict at this week's board meeting in order to encourage a positive answer from Iran.

ElBaradei said in opening the IAEA meeting on Monday that he remained "convinced that the way forward lies through dialogue and mutual accommodation among all concerned parties".

Related Links
-