US Secretary of State Condoleezza Rice declined immediate comment on Saturday to Ahmadinejad's speech, but urged Tehran to hold "realistic discussions" on the standoff.

  

Rice told reporters: "I hope Iran will engage in realistic discussions with the rest of the world about what is possible."

   

France on Saturday said the address to the UN General Assembly made it just as likely as before that the United States, Britain, France and Germany would seek to refer Iran to the Security Council for possible sanctions next week.

   

"What I heard today makes me predict that the option of reporting Iran to the Security Council remains on the agenda," Foreign Minister Philippe Douste-Blazy said.

   

Europe had hoped Ahmadinejad would hold out an olive branch. Instead, he again insisted that Iran had an inalienable right to produce nuclear fuel and accused the United States and other major powers of breaching nuclear treaties.

 

Out of deal

  

Iran last month pulled out of a deal with the three EU countries and reactivated a factory that converts uranium ore into gas, leading Britain, France and Germany to break off negotiations.

  

"This was an unhelpful speech on which we will now want to consult our partners on the IAEA (International Atomic Energy Agency) board of governors"

British Foreign Office spokesman

The conversion process can be used in the production of nuclear weapons, although Iran says its intentions are peaceful.

   

"This was an unhelpful speech on which we will now want to consult our partners on the IAEA (International Atomic Energy Agency) board of governors," a British Foreign Office spokesman said.

   

"The only way to resolve [the dispute] is diplomatically, but the Iranian president has offered nothing in this speech to suggest that he wants to abide by the agreements Iran has made," the spokesman said.

   

A US official also said the speech had given no indication of an Iranian change of heart.

   

"I certainly did not hear anything in his remarks that indicated a fundamental change in strategic viewpoints," the official said on condition of anonymity.