Iranian Foreign Minister Kamal Kharrazi on Wednesday denied that Iran has the technology to produce nuclear weapons and reaffirmed that Tehran would never abandon its nuclear programs.

"No, we do not have the technology to produce nuclear weapons. We have the technology to enrich uranium. This is a difference between having the technology to enrich uranium needed for power plant as fuel and the technology to actually make a bomb," he told a meeting on the fringes of the U.N. General Assembly.

With Iran under a deadline set by the U.N. nuclear watchdog agency to prove by Oct. 31 that its nuclear aims are peaceful, Kharrazi gave little ground.

Tehran is willing to negotiate on stricter inspections with the International Atomic Energy Agency (IAEA) "but the problem is the Americans believe (that) is not enough," he said.

Asked if Iran would consider abandoning its nuclear activities, Kharrazi, speaking at an event sponsored by the Business Council for the U.N., said: "No. No way. No reason."

The IAEA, under U.S. pressure, has raised concerns about Iran's nuclear aims and given Tehran until the end of October to dispel doubts it is secretly developing nuclear arms.

The agency has also urged Tehran to sign and implement an Additional Protocol of the Nuclear Non-proliferation Treaty which would allow snap inspections of any suspected site.

CHIRAC PRESSURE

French President Jacques Chirac, in an interview with USA Today, said if Iran "agrees to all the necessary controls" he would back Tehran's development of a civilian nuclear program.

But if not, Chirac said he would support a U.S. push to take the issue to the U.N. Security Council where sanctions might be imposed.

Underscoring their charge that Iran is developing arms, the Americans say the Islamic republic does not need nuclear energy because it is one of the world's major oil producing countries. Hence, its nuclear programs must be for weapons.

But Kharrazi said that with an annual growth rate approaching 8 percent, Iran is using up its reserves and "we need to diversify our sources of energy."

The United States severed diplomatic ties with Iran in 1979 when Islamic fundamentalist student revolutionaries held 52 diplomats hostage for 444 days at the U.S. embassy in Tehran.

Former President Bill Clinton made tentative steps toward resuming contacts, but President Bush has lumped Iran in an "axis of evil" along with Iraq and North Korea.

Kharrazi said Washington did not appreciate Iran's help in the U.S.-led war to oust from Afghanistan the al Qaeda militant group, blamed for the Sept. 11, 2001 attacks.

He said improved ties would depend on "reciprocal" cooperation and renewed Iran's call for Washington to release $10 billion in frozen Iranian assets and lift U.S. sanctions.

The Bush administration's "mindset ... has to be corrected. Iran is an anchor of stability in that region. Why do they have this mindset toward Iran which is very negative?" he asked.

In a speech before answering questions, Kharrazi called the U.S. occupation of Iraq a "mistake (which) if left uncorrected may contribute to undermining the moderate mainstream in the Islamic world."

"The ouster of Saddam (Hussein) was a welcome development, but the situation in Iraq and the whole region could be much worse if the U.S. chooses to stay the current course."

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