The Iranian deputy oil minister said Sunday he did not believe the United Nations would impose sanctions on Iran because that would boost oil prices even higher.

"Any action like that will increase oil prices very high. And I believe that the UN or its bodies will not put any sanctions on oil or the oil industry," M.H. Nejad Hosseinian told reporters after talks in Islamabad with Pakistani officials over a proposed pipeline to transport Iranian gas to Pakistan and India.

Iran's top nuclear negotiator, Ali Larijani, who is also Iran's Sercretary of Supreme National Security Council, sits prior to delivering his speech to students at the Sharif University of Technology, in Tehran, Iran, Sunday, April 30, 2006.[AP]

The United States and its European allies have pushed the possibility of sanctions after a report from the UN nuclear monitor confirmed the Iranians had successfully produced enriched uranium and defied the Security Council's Friday deadline to stop the process.

Russia and China ¡ª two veto-wielding Security Council members ¡ª have opposed the possibility of such punitive actions.

Iran has not budged on the enrichment program. But it offered Saturday to allow UN inspectors to resume snap inspections of its nuclear facilities if the Security Council left the dispute to the UN nuclear monitor, the International Atomic Energy Agency.

The White House rejected the offer, saying Iran must give up its nuclear ambitions and the debate must move to the Security Council.

Secretary of State Condoleezza Rice said Sunday she believed Iran was "playing games."

"But, obviously, if they're not playing games they should come clean, they should stop the enrichment," she told ABC's "This Week."

Rice also said the United States probably would seek a UN resolution requiring Iran to comply with demands that it stop enriching uranium. Rice mentioned a resolution under Chapter 7 of the UN Charter, which means it can be enforced through penalties or military action.

"The international community's credibility is at stake here," she said. "And we have a choice, too. We can either mean what we say, when we say that Iran must comply, or we can continue to allow Iran to defy."

Enriched uranium, depending on the degree of processing, can be used either to fuel civilian power plants or to make nuclear weapons.

While Iran insists it has no plans to make weapons and does not need or want them, the United States, Britain and France suspect the program is aimed at producing nuclear warheads.

In Tehran, Iranian Foreign Ministry spokesman Hamid Reza Asefi said Iran wanted to resolve the dispute through diplomacy but warned it would not "surrender under threats and pressures."

But Asefi reiterated Iran's offer off allowing intrusive inspections if the Security Council dropped the matter. He did not comment on Washington's rejection of the proposal.