Iran will reject any European proposal for a complete cessation of its work on the nuclear fuel cycle, but is willing to consider further "confidence-building" measures and extending a suspension of uranium enrichment, a top Iranian official told reporters on Saturday.

"We would be willing to consider any package that recognizes the full right of Iran to enjoy peaceful nuclear technology within the framework of the NPT (nuclear Non-Proliferation Treaty)," Hossein Mousavian, a senior national security official involved in the nuclear negotiations, said. "But Iran is not prepared for cessation. Any package including a cessation of fuel cycle work would be rejected by Iran," he added.

Mousavian said Iran expected the International Atomic Energy Agency (IAEA) to recognize its right under the NPT to possess the full nuclear fuel cycle. If this were the case, he said the Islamic republic was ready to consider extending its suspension of uranium enrichment and discuss new initiatives that would provide long-term guarantees that the process would never be diverted to military purposes.

His comments came after Britain, France and Germany -- who have been spearheading negotiations with Iran -- told the United States they will in the coming days offer Iran incentives to persuade it to halt uranium enrichment activities.

The so-called "EU Three" will offer the package of inducements as a November 25 deadline looms for Iran to comply with IAEA demands to suspend uranium enrichment and come clean about its nuclear ambitions or be referred to the UN Security Council for possible sanctions.

EU package comes from mistrust, says Iran

Diplomats say the package would give Iran access to imported nuclear fuel and other perks in return for a total suspension of its own work on the nuclear fuel cycle. "Iran is definitely open to confidence-building measures, full cooperation with the IAEA, full transparency and all confidence building measures that are required to assure the world that all enrichment activities would always remain peaceful and never be for military purposes," Mousavian said.

"If they have a mistrust of our future enrichment activities and fear its diversion to nuclear weapons, this chapter is open to the IAEA to implement a mechanism that assures it remains peaceful." But he repeated that "the fuel cycle is definitely a legitimate right of every member" of the IAEA. "Cessation would be discrimination against an IAEA member in the implementation of the NPT and safeguards," he added.

Diplomats say they have been trying to convince Iran to strike a "Libya-style deal", whereby the country surrenders some of its sensitive nuclear capabilities -- such as the fuel cycle -- in return for diplomatic and trade incentives. While the talk has been of suspending or halting fuel cycle work, the Europeans and the United States would eventually like to see Iran give it up altogether.

Libyan model will not work on Iran

But Mousavian said Iran was not Libya. "The Libyan formula would not work with Iran. Iran is a country with thousands of years of history, with huge human resources. With such a nation, you cannot talk and discuss like you do with Libya. And we have the technology already. We have the know-how already," he asserted.

"We are prepared for the continuation of confidence-building measures. But there are two conditions: that the rights of Iran are respected and the contents of the package. Is it sellable? Are they serious in implementing the package?"

"Mistrust is bilateral. If the Americans and the Europeans do not trust Iran, we cannot trust them."

Iran has no interest in nuclear weapons

The official, responsible for foreign affairs within Iran's Supreme National Security Council, also reiterated denials that the country was even interested in nuclear weapons. "We really believe weapons of mass destruction do not bring security for any country. Not Pakistan, India or Israel. They would never be able to use these weapons, so they are just for power prestige. Hundreds of millions of dollars spent for nothing," he said.

Referring to the 1980-1988 war with Iraq, he said "Iran was the first victim of weapons of mass destruction after World War II. But we did not retaliate with mass destruction weapons: that is confidence building."