Iran has rejected a European Union proposal that it stop enriching uranium in return for nuclear technology, increasing the likelihood that it will be reported to the U.N. Security Council for possible sanctions.
Diplomats had said that if Iran rejected the proposal drafted by Britain, Germany and France, most EU countries would back a U.S. demand that Tehran be reported to the Security Council when the International Atomic Energy Agency (IAEA) meets on November 25.
The EU trio want Iran to halt uranium enrichment since it can be used to make nuclear bomb material. Iran insists it only wants to make the fuel for nuclear power stations.
"The EU proposal is unbalanced ... unlimited uranium suspension is unacceptable for Iran," Foreign Ministry spokesman Hamid Reza Asefi told a news conference on Sunday.
But Asefi left the door open for an agreement after further talks, scheduled to take place later this week in Vienna.
"We view the European offer as a primitive proposal not a final one," he said. "Negotiations will continue on Wednesday. We will have our own suggestions and we will study the Europeans' proposal and will give the Europeans the results."
Washington accuses oil-rich Iran of using its nuclear programme as a veil for developing an atomic arsenal. Tehran says it only wants to generate electricity.
The EU "big three" Britain, Germany and France, have led a European effort at compromise that would avoid sending Iran's case to the U.N. Security Council.
"The Europeans have chosen the right way by negotiations," Asefi said. "We have to reach an agreement that would solve the Europeans' worries and give us our rights."
Even before Asefi's comments diplomats and analysts had expressed doubts that Iran would accept the EU trio's proposal.
"They're quite confident right now," said political analyst Mahmoud Alinejad.
"They think that even if they are referred to the Security Council it will not be that serious in that there won't be an embargo on Iran's oil or anything really damaging and if sanctions are imposed it would end up being more (politically) damaging for the Europeans and Americans than for them."
Iran feels it can rely on permanent Security Council members Russia and China to use their veto power or at least abstain in any vote against Iran.
One European diplomat familiar with the EU trio's proposal said it contained too little to attract Iran.
In return for giving up uranium enrichment the Europeans would guarantee a supply of reactor fuel and help Iran build a light-water power reactor. The Europeans also pledged to resume talks on a trade deal, cooperate on terrorism and drug trafficking and explore joint investment opportunities.
"The carrots are too vague and the Iranians are mistrustful of the guarantees. They won't be very interested but it may be enough to start a process of negotiations," the diplomat said.
He added that Washington feared Iran would drag out the talks to buy more time to develop its nuclear programme.
Hossein Mousavian, one of Iran's top nuclear negotiators, expressed confidence that an agreement would be reached before the next IAEA board meeting, thus averting a showdown in the Security Council.
"The important thing is that Iran and Europe reach a general agreement before the November meeting," he told state television. They can then discuss the details after the November meeting."