Iranian cleric says US, UN can't "bully" Iran

TEHRAN, May 5 (Reuters) Iran will not be pushed into abandoning its nuclear fuel work by United States pressure or a United Nations resolution, an influential cleric today said.

Ahmad Khatami also told worshippers at Friday prayers in Tehran that any country which chose confrontation with Iran would regret the move ''for ever''.

France, Britain and Germany, with US backing, have drafted a UN resolution that demands a halt to Iran's nuclear fuel programme, which they fear is aimed not only at power stations but also at arms. Tehran denies the charge.

''The US and the Security Council can rest assured that Iran is not a country to retreat in the face of bullying resolutions,'' Khatami said.

Khatami, no relation of the former liberal President Mohammad Khatami, is a hardliner who sits on the Assembly of Experts, the body of 86 clerics that constitutionally supervises Supreme Leader Ayatollah Ali Khamenei.

''Iran is a strategically sensitive part of the region. Be assured that Iran's insecurity means insecurity for the Middle East and the smoke will sting your eyes too,'' he added, in remarks broadcast live on state radio.

Iran is the world's fourth biggest oil exporter and often warns any action against it will ramp up oil prices beyond levels developed economies can bear.

It also holds a strong military vantage point over the world's main oil-tanker nexus, the Strait of Hormuz, and Israel is within range of its ballistic missiles.

''If you take the path of confrontation instead of the path to negotiations ... you should know that the reaction of the great Iranian nation will be something that the enemy will regret for ever,'' Khatami added.

US and EU diplomats hope they can convince permanent Security Council members China and Russia to back their draft resolution by specifying that this resolution will not provide a basis for sanctions or military action.

Iran's economy would be highly vulnerable to sanctions on imported gasoline, bank loans and engineering equipment.

Washington has said it would prefer a diplomatic solution to the crisis but has said military strikes are an option and that it is willing to take action independently of the Security Council to stop Iran getting an atom bomb.

REUTERS OM RN1840