"Thanks to God, we are a nuclear state," Ahmadinejad said in a speech in the west of the country. "We will not bow to injustice and pressure. If they want to attack the rights of the Iranian people, we will stamp shame and regret on them."

Iran insists it has a right to enrich to make reactor fuel, but the process can be extended to make nuclear weapons. Western powers, led by the United States, are convinced Iran is seeking either a nuclear bomb or the "strategic capacity" to make one.

Iran's refusal to freeze enrichment by Friday in line with last month's UN Security Council demand opens the door to sanctions, despite opposition from Russia and China. The United States has also not ruled out taking military action.

The UN's nuclear watchdog, the International Atomic Energy Agency (IAEA), was scheduled to release a report Friday on Iranian compliance. Senior diplomats from the Security Council's five permanent members plus Germany are due to discuss the next steps in a meeting in Paris on Tuesday, although Ahmadinejad showed no sign of worry.

"They think that by frowning, adopting resolutions and going from one organization to the other, they can hide their horrible face and unjust decisions behind the agency and the Security Council and make us back down," he said. "We have obtained nuclear fuel technology by ourselves, and nobody can deprive us of it."

Ahmadinejad also took a fresh swipe at Israel by

complaining that Germany was being exploited by "greedy Zionists" more than 60 years after World War II.

"Look at the German people. Three generations ago, there was a war. But today an intelligent people is still a hostage of World War II," he said in a speech carried on state television.

Germany, he said, "still doesn't have the right to have independent policies or proper defences."

"Every German born is indebted to the arrogant and greedy Zionists," Ahmadinejad said, referring to German reparations for the Holocaust.

"When you visit a country, in every town there is a symbol of national pride," Ahmadinejad said, but added that in Germany "every town has something saying to the great German people that their parent and grandparents were murderers."

Last-minute talks fail

Last-minute talks between Iran's nuclear chief Gholam Reza Aghazadeh and IAEA director Mohamed ElBaradei on Wednesday failed to make any headway, diplomats said.

One diplomat said Aghazadeh simply "just rattled around on Iran's previously stated positions. He did not propose anything new."

The White House has warned the country was facing further international isolation after supreme leader Ayatollah Ali Khamenei threatened global retaliation to any American military action.

Iran has already warned that sanctions could force it to halt cooperation with the IAEA or even quit the nuclear Non-Proliferation Treaty.

China, Russia oppose action

In Beijing, Chinese foreign ministry spokesman Qin Gang issued an appeal for calm.

"We indeed think the Iranian nuclear issue is at a crucial stage," he said. "We hope all parties concerned can keep calm, exercise restraint and create favorable conditions so as to properly resolve this issue."

Russian President Vladimir Putin also said the IAEA needed to continue playing a key role in the crisis -- signaling his reluctance to see the matter fully referred to the Security Council.

"It is too early to run ahead and say what decisions we might take together," he said during a joint news conference with German Chancellor Angela Merkel in the Siberian city of Tomsk. "The main thing is that any decisions that are made must be made in agreement."

Merkel, whose country is Iran's largest European trading partner, also called for a diplomatic resolution to the standoff.

NATO dinner talk

Speaking in the Bulgarian capital Sofia, NATO chief Jaap de Hoop Scheffer voiced concerns.

"Although it is not playing the first violin, what happens there (in Iran) is a very NATO-relevant subject," he said as he prepared to host talks among the alliance's foreign ministers including US Secretary of State Condoleezza Rice. "I think I can safely say Iran will be a subject of conversation at dinner tonight."