Iran said Tuesday it would never suspend uranium enrichment as demanded by the West, a day after world powers agreed to work on a new UN resolution to pressure Teheran to back down over its nuclear program.

Officials from the five permanent UN Security Council members the United States, France, Russia, China and Britain plus Germany, who met in London on Monday, also said they were committed to a negotiated resolution to the standoff.

The United States says "all options" are on the table and insists it wants a peaceful solution. Russia has voiced concern about growing talk of military strikes and China Tuesday again called for a diplomatic solution.

"Suspending uranium enrichment is an illegal and illegitimate demand... and it will never happen," Iranian Foreign Minister Manouchehr Mottaki was quoted by the official IRNA news agency as saying.

The United Nations imposed limited sanctions on Iran's nuclear program in December and Teheran faces possible further steps for ignoring a February 21 deadline to halt enrichment.

Iran's open refusal to halt enrichment, a process it insists it only wants to make fuel for nuclear power plants, is echoed by some Iranian officials in private, suggesting the public pronouncements are more than just rhetoric.

British Prime Minister Tony Blair said Iran was making a "big miscalculation" with its defiance. "The comments from Iran are very worrying... because yet again they are indicating they want to defy the international community," he said.

US State Department spokesman Sean McCormack said after the London meeting world powers would hold phone talks tomorrow to discuss elements of a new resolution.

New steps could include a travel ban on senior Iranian officials and restrictions on non-nuclear business.

"There is a big chance that we will all be able to agree quickly, including the Russians and the Chinese, the Americans, the British and the French, on a second resolution with economic sanctions," French Foreign Minister Philippe Douste-Blazy said.

He also said in his televised comments that military strikes on Iranian atomic sites were "absolutely not an issue".

Iran's ambassador to Moscow, Gholamreza Ansari, said Iran "may retaliate anywhere" if it came under US attack. Supreme Leader Ayatollah Ali Khamenei, Iran's top authority has said US interests would be hit if his country was targeted.

Iran, the world's fourth biggest oil producer, runs a few hundred centrifuges used for enrichment. It is setting up the first of 3,000 new machines for what it calls "industrial-scale" enrichment, even though its first atomic power plant is still being built and will use fuel supplied by Russia.

(China Daily via agencies February 28, 2007)