TEHRAN, June 3 -- United Nations Secretary General Kofi Annan said on Saturday that continued negotiations is the only way to help settle Tehran's controversial nuclear issue, the official IRNA news agency reported.

United Nations Secretary General Kofi Annan.(File Photo)

Annan made the remarks in a telephone conversation with Iranian President Mahmoud Ahmadinejad, hoping that the crisis would be settled through dialogue and mediation.

"I understand that Iran is opposing any threats to national security and I drew attention of the U.S. and European parties to the fact that Iran is right to dismiss any threat concerning nuclear program," the U.N. chief was quoted as saying. For his part, Ahmadinejad reasserted that Iran is ready to hold talks on the nuclear program, adding that Iran prefers the negotiations to be held democratically without any precondition or any threat.

"Iran believes that diplomacy and dialogue are effective to remove the logjam and supports the role of the UN secretary-general to bring the current crisis to an end."

Meanwhile, Ahmadinejad insisted Iran's right under the Non-Proliferation Treaty (NPT), saying fair implementation of the international conventions is the only way out of the current crisis on Iranian nuclear program.

The five permanent members of the Security Council plus Germany on Thursday agreed a new package to offer Iran new talks but insisted that Iran first suspend uranium enrichment.

The two-part package contains both incentives to encourage Iran to cooperate, and the warning of punishment by the UN Security Council if Tehran does not comply.

But no details about the incentives have been unveiled. Iran's Foreign Minister Manouchehr Mottaki said Saturday that Tehran would examine a new proposal over its nuclear dispute before giving its formal response.

"We think that if there is good will, a breakthrough to get out of a situation they (the European Union and United States) have created for themselves ... is possible," Mottaki told a press conference.

Meanwhile, Mottaki reasserted that no condition should be set for negotiations.

"Negotiations must be without preconditions. No condition for negotiations is acceptable, especially the condition that has been set," Mottaki said.

European Union foreign policy chief Javier Solana will visit Tehran in the next two days and present the new proposal to Iran. Enditem