The comments from Foreign Minister Manouchehr Mottaki starkly underlined Tehran's refusal to abandon a process that Western countries want Iran to renounce and is the key sticking point in the escalating nuclear standoff.

"Any incentive that does not include Iran's right to nuclear technology and the ways to secure it will not have any attraction for the Iranian people and government," the IRNA agency quoted Mottaki as telling reporters in Indonesia.

For Iran, the right to nuclear technology means first and foremost its right to uranium enrichment, a highly sensitive process that can be used both for making nuclear fuel and in a weapons program.

Europe is currently preparing a new package of trade, security and technological incentives to try to entice Tehran away from uranium enrichment and resolve the nuclear crisis peacefully.

However Mottaki warned the Europeans "not to make the same mistake" he said they made last August when they came up with a list of incentives that also demanded Iran gives up uranium enrichment.

"We hope that our case will be dealt in a way that Iran's right to peaceful nuclear technology will be recognized," Mottaki told reporters in Bali, where he is attending the D-8 Summit with President Mahmoud Ahmadinejad.

"It is then that Iran will provide its utmost cooperation," he said.

European Union efforts since 2003 to win guarantees that Iran's nuclear program is peaceful in nature have foundered, with Iran defiantly pushing ahead since April on enriching uranium.

Iran says it has enriched uranium to 4.8 percent, sufficient to make nuclear fuel for a power station. In highly enriched form, the uranium can form the explosive core of an atomic bomb.

The United States charges that Iran is using its nuclear program -- which Tehran insists is a merely peaceful effort to generate electricity -- to hide the development of nuclear weapons.

Tehran last year rejected a previous offer of incentives, including desperately needed civilian aircraft parts and support for World Trade Organization membership, insisting on the right to enrich uranium on its soil.

Mottaki's warning came after UN Secretary General Kofi Annan urged the United to talk directly to its arch foe over the nuclear issue, saying Tehran would not negotiate seriously if Washington is not involved.

However the United States lost little time in rejecting Annan's advice, with State Department spokesman Sean McCormack saying Tehran was interested only in "delaying and stalling".

"We believe that we are following the right diplomatic process now," he said.

In a development that could further intensify the crisis, diplomats said UN inspectors found traces of weapons-grade uranium in vacuum pumps at the Lavizan-Shian site in Tehran where Iran had denied carrying out such work.

Iran denied that such particles had been found.

UN nuclear chief Mohamed ElBaradei said Thursday he was "optimistic" about Washington giving its European allies more time to seek a solution, after a deadlock at the UN Security Council on moving towards sanctions against Iran.

Diplomats said negotiators from the Council's permanent members -- the United States, Russia, China, Britain and France -- plus Germany planned to meet in London on May 19 to weigh a new package of incentives as well as penalties.

Although the United States has insisted on its wish to see the crisis resolved through diplomacy, administration officials have steadfastly refused to rule out the option of military action.

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