Iran refused Thursday to cede "an inch" in its refusal to halt uranium enrichment, openly flouting the Aug. 31 deadline imposed by the UN Security Council for suspending the program.

Iranian President Mahmoud Ahmadinejad said he would not buckle in the face of mounting pressure, hours before the Vienna-based UN nuclear watchdog was expected to report Tehran in defiance of the Security Council.

"Iran will not back down an inch in the face of intimidation, aggression and will not accept being deprived of its rights," Ahmadinejad said in a speech in northwestern Iran on Thursday.

"The powers of oppression do not want Iran to progress. But I say to them: The Iranian people, including young scientists who have succeeded with empty hands and without your help to reach the summits of nuclear technology, can also develop Iran."

The UN Security Council has mandated that Iran must suspend all uranium enrichment and reprocessing activities by Aug. 31, spurred by fears in the West that Tehran is covertly seeking to make the atom bomb. Iran insists the program is aimed at producing electricity.

Report: West planning sanctions

Germany, the United States, France, and Britain were reportedly drawing up plans for a three-stage system of international sanctions designed to force Iran into compliance.

The progressively tougher measures would begin with an embargo on the sale of nuclear-related materials and a limited travel ban for Iranian officials, graduating to a broader travel ban and the freezing of overseas assets and then, if these measures fail, restrictions on commercial flights and World Bank loans, the New York Times reported.

The five permanent members of the council -- Britain, China,

France, Russia and the United States -- plus Germany, have sought to coax Tehran into suspending enrichment by offering a package of security, trade and technology incentives.

But Russia and China have shown great reluctance even to threaten Iran with sanctions.

US Undersecretary of State Nicholas Burns said on Wednesday that he expected sanctions to be imposed within a month.

"We believe the sanctions regime will be agreed to in September by the Security Council and we're going to work towards that with a great deal of energy and termination," he told CNN.

US State Department spokesman Sean McCormack said senior officials from Britain, China, France, Germany, Russia and the United States would meet in Europe early next week to begin discussing sanctions against Iran if it is deemed to have flouted the UN deadline.

Ahmadinejad appeals to European powers

In an apparent attempt to drive a wedge between the United

States and its European partners, President Ahmadinejad called on Europe to solve the row over Iran's nuclear program through negotiations and act independently of Washington, the state-run IRNA news agency reported on Thursday.

"By adopting independent and logical policies, the Europeans can change for the better the region's attitude towards them. The Europeans should not follow wrong and aggressive US policies, since the US only thinks about itself," Ahmadinejad was quoted as saying.