Iran says it will reject any nuclear deal offered by major powers that demands that the country halt uranium enrichment.
This was announced in reaction to the offer delivered to Tehran on Saturday by Javier Solana, the European Union's foreign policy chief, on behalf of six major powers.
They have proposed a modified package of benefits for Iran, which include offers of trade and other incentives.
But Gholamhossein Elham, an Iran government spokesman, said: "If the package includes suspension, it is not debatable at all."
Cristina Gallach, Solana's spokeswoman, said the incentives package was presented to Manouchehr Mottaki, the Iranian foreign minister.
Talks are taking place, she said.
Solana arrived in Tehran on Friday to outline an offer agreed in May by the US, China, Russia, France, Britain and Germany.
The package, including civilian nuclear co-operation, is a revised version of an offer rejected by Iran two years ago.
Iran, the world's fourth-largest oil producer, says its nuclear programme is designed to generate electricity but Western powers allege that it is aimed at making nuclear weapons.
The US and the 27-nation EU have threatened to impose more sanctions on the Islamic republic if it does not stop uranium enrichment.
Bush reaction
Later on Saturday, the US president, expressing his disappointment with Tehran's reaction, said Iran has isolated its people and put the world in danger by rejecting the offer.
"I'm disappointed that the leaders rejected this generous offer out of hand," George Bush said from Paris.
"It's an indication to the Iranian people that their leadership is willing to isolate them further. Our view is we want the Iranian people to flourish and to benefit."
Nicolas Sarkozy, the French president, took the same approach as Bush at a joint news conference.
He said the Iranian people "deserve better than the impasse into which some of their leaders are leading them".