Iran's president said Thursday his regime is ready for talks over its nuclear capabilities, but he sent mixed signals on how much is open for negotiation and suggested Tehran has the upper hand in its showdown with the West.

Iranian President Mahmoud Ahmadinejad points during a public gathering during his visit to the city of Qazvin, 90 miles (150 kilometers) west of the capital Tehran, Iran, Thursday, June 8, 2006. Mahmoud Ahmadinejad said Thursday that Iran was ready to discuss 'mutual concerns' over its controversial nuclear program but claimed that the West gave in to Iran. Ahmadinejad did not say whether Iran accepts a Western package of incentives aimed at enticing Iran to suspend uranium enrichment to open the way for negotiations with the United States and Europe. [AP]

Mahmoud Ahmadinejad repeated Iran's position that uranium enrichment is an untouchable national right, a clear jab at the West two days after Iran received a package of economic and technological incentives to suspend the program.

But he also offered some signs of flexibility without specifically mentioning the proposal. In a speech at an industrial city, he said Iran would hold dialogue on "mutual concerns" with foreign powers, including the United States if they took place "free from threats."

A report to the U.N. nuclear agency's board, meanwhile, said Iran slowed enrichment over the past month but picked up the pace Tuesday, the day the proposal for talks was delivered. There was no indication in the report, obtained by The Associated Press, that the two events were linked.

While the slowdown in enrichment could reflect a decision by Iran to send a positive signal before talks, a senior U.N. official said it also could be the result of technical difficulties. The official agreed to discuss the confidential report only if not quoted by name.

Ahmadinejad portrayed Iran as having forced Washington and its allies to accept the Islamic regime's "greatness and dignity" and increasingly bend to its will.

The shifting messages are seen as part of Iranian posturing before possible talks, which could include the United States after a nearly 27-year diplomatic freeze. Western nations, led by the U.S., worry Iran's uranium enrichment technology could become the backbone for a nuclear arms program. Iran insists it only seeks electricity-producing reactors.

"The nation will never hold negotiations about its definite rights with anybody, but we are for talks about mutual concerns to resolve misunderstandings in the international arena," Ahmadinejad told thousands of people in Qazvin, about 60 miles northwest of Tehran.

In a major policy shift, the United States agreed last week to join France, Britain and Germany in talks with Iran, provided Tehran suspends all suspect nuclear activities. Tehran has welcomed direct talks with Washington, but rejected any preconditions.

Ahmadinejad did not say whether Iran would accept the Western package of incentives, which were presented Tuesday by the European Union's foreign policy chief, Javier Solana.

Its contents have not been made public, but diplomats have said the package includes economic rewards and a provision for some U.S. nuclear technology if Iran halts enriching uranium - a major concession by Washington. World powers also have suggested the length of the proposed enrichment suspension could be subject to negotiation, diplomats said.

The offer, however, also contains the implicit threat of U.N. sanctions if Iran remains defiant.

Iran's initial reaction to the package was relatively upbeat. But Tehran has said it will only announce its position after carefully studying the package. Solana said he expects a reply within "weeks."

In London, British Prime Minister Tony Blair said the U.S. offer for direct talks with Iran was a "big step forward." France's foreign minister, Philippe Douste-Blazy, gave a similar assessment and added that "it is up to the Iranians to respond."

Ahmadinejad's speech, broadcast live on Iranian state television, hit back with hard-line rhetoric.

Iran's "enemies must know that whether the Iranian nation is going to hold talks or not, whether you frown or not ... the Iranian nation will not retreat from the path of progress and obtaining advanced technology one iota," he said.

He also praised Iran for standing up to "international monopolists," a reference to the United States and its allies.

They have "been defeated in the face of your resistance and solidarity and have been forced to acknowledge your dignity and greatness," Ahmadinejad told the crowd.

In Vienna, Austria, the report circulated to the 35-nation board of the International Atomic Energy Agency said Iran had slowed uranium enrichment in recent weeks but also continued experiments with the technology.

The document also said U.N. inspectors had made little progress on clearing up worrying aspects of Tehran's past nuclear activity.

Specifically, the three-page report said Iran still declined to clarify Ahmadinejad's statements that his country had experimented with advanced centrifuges that speed up enrichment,

Iran also refused to provide more information on a document showing how to compress fissile material into the shape used for warheads, the report said. Tehran also declined to allow interviews of nuclear officials linked to potentially worrying finds by inspectors, it said.

The senior U.N. official, who is familiar with the report, said it contained nothing that significantly hardened or diminished concerns about Iranian nuclear ambitions since the last IAEA report in late April.