Iran again rules out nuclear halt

TEHRAN (Reuters) - Iran again ruled out suspendingsensitive nuclear work on Saturday, despite an offer by sixworld powers of trade and other benefits to try to coax it intostopping activities the West fears are aimed at making bombs.

European Union foreign policy chief Javier Solanareaffirmed the six powers behind the package wanted Iran tosuspend enrichment during talks on the offer -- a preconditionthe Islamic Republic has repeatedly rejected.

"The proposals we have made offer substantial opportunitiesfor political, security and economic benefits to Iran and theregion," their foreign ministers said in an accompanyingletter.

"We are convinced that it is possible to change the presentstate of affairs. We hope that Iran's leaders share the sameambitions," they said.

The incentives offer agreed by the United States, Russia,China, Britain, France and Germany last month is a revisedversion of one rejected by Iran in 2006.

Diplomats have played down prospects for a breakthrough ina dispute that has helped send oil prices to record highs.

The United States and its European allies have warned ofbroader sanctions against Iran if it rejects the proposal andpresses ahead with atomic activities which can have bothcivilian and military uses.

Solana said he expected a reply soon from Iran, which saysit will not stop a nuclear programme it says is for generatingelectricity so that the world's fourth-largest oil producer canexport more crude and natural gas.

He said he hoped the powers' overture, tailored to coaxTehran into stopping pursuit of enrichment ability, a possiblepathway to atom bombs, would be a springboard to negotiations.

"We continue to ask for suspension," Solana told a newsconference after presenting the incentives package to Iran'sForeign Minister Manouchehr Mottaki.

BUSH "DISAPPOINTED"

The offer included help for Iran to develop a civiliannuclear programme with light water reactors -- seen as lessprone to diversion into bombmaking than technology Tehran nowhas -- and legally-binding nuclear fuel supply guarantees.

"We are offering a proposal which we would like to be thestarting point for real negotiations," Solana said.

The six powers were ready to fully recognise Iran's rightto have nuclear energy for peaceful purposes, he said.

Flush with record oil revenues that have helped itwithstand U.N. sanctions imposed over its nuclear defiance,Iran has long ruled out ending its quest for its own enrichmentindustry.

"Iran's view is clear: any precondition is unacceptable,"government spokesman Gholamhossein Elham said when asked aboutthe batch of sweeteners. "If the package includes suspension itis not debatable at all."

Although Iran has not officially rejected the offer, U.S.President George W. Bush said he was disappointed when askedabout Elham's statement during a visit to Paris.

"I am disappointed that the Iranian leaders rejected thisgenerous offer out of hand," Bush told a joint news conferencewith French President Nicolas Sarkozy, adding it was a signthat Iran's leadership was willing to isolate its peoplefurther.

Sources on both sides said Iranian officials and Solana hadstill agreed to resume efforts to find a diplomatic solution.

Mottaki suggested Iran was ready to engage in negotiations,but said its response to the major powers' incentives dependedon their reaction to Tehran's own package of proposals aimed atdefusing the row, submitted to the EU and others last month.

Diplomats say Iran's proposals failed to allay concernsabout its uranium enrichment programme.

Iran's refusal to stop enriching uranium, which can be usedas fuel for power plants or provide material for bombs, hasdrawn three rounds of U.N. sanctions since late 2006.

The United States says it wants a diplomatic solution buthas not ruled out military action as a last resort.

(Additional reporting by Hashem Kalentari and ZahraHosseinian; Writing by Mark Heinrich and Fredrik Dahl; Editingby Michael Roddy)