Hamid Reza Asefi, a foreign ministry spokesman, said on Sunday: "We are not going to suspend [enrichment]. The issue was that everything should come out of negotiations, but suspension of uranium enrichment is not on our agenda."

Iran said it would formally respond by Tuesday to proposals made by the US, Russia, China, France, Britain and Germany.

Suggesting Iran will not give a clear 'yes' or 'no', Asefi said: "As the proposal has had several dimensions, our answer will be multi-dimensional too."

Iran's case has already been sent back to the UN security council because Tehran did not reply quickly enough and, last month, the council passed a resolution demanding Iran suspend enrichment by August 31 or face possible sanctions.

The package

The package offers Iran state-of-the-art nuclear technology, the easing of some trade restrictions and other incentives such as support for a regional security dialogue.
   
Kofi Annan, the UN secretary-general, appealed to Iran to respond positively: "Iran's reply will, I trust, be positive and that this will be the foundation for a final, negotiated settlement."
 
The US has said it will only join multilateral talks with Iran if it halts enrichment, a move seen as a policy shift in Washington which cut ties with Tehran after the 1979 Islamic revolution.

Washington has also warned of swift UN action if Iran refuses, and has not ruled out military action.

Analysts say Iran's defiance may be based on a calculation that divisions at the UN mean it will only face modest measures such as travel restrictions on officials or asset freezes.

Obstruction
   
Western diplomats who follow the work of the International Atomic Energy Agency (IAEA) say Iran has been "complicating" the UN watchdog's work in monitoring nuclear sites in the run-up to the August 31 deadline, denying entry to a senior inspector and cutting back on multiple-entry visas for IAEA staff.
  
One Western diplomat said: "It's not outright obstruction, but Iran is creating complications within its rights [not created before]. They have reduced cooperation to a minimum under treaty obligations."
 
Asefi said one inspector had been "replaced on Iran's request" although he said Iran was continuing to give routine access. But he suggested this policy could change.
   
Mahmoud Ahmadinejad, the Iranian president, has threatened to quit the nuclear Non-Proliferation Treaty if Iran feels undue pressure.