Lebanon could overshadow Iran's study of nuclear deal

PUTRAJAYA, Malaysia, Aug 3 (Reuters) Iran said today it was still weighing an international package of incentives to suspend its nuclear programme but conflict in Lebanon had diverted its attention.

On Monday, the UN Security Council demanded that Iran suspend its nuclear activities by August 31 or face the threat of sanctions, although Iran responded by insisting on its right to produce nuclear fuel.

''We have said we are open to negotiations, and in the shadow of negotiations it is possible to settle any dispute,'' President Mahmoud Ahmadinejad told reporters in Malaysia's administrative capital of Putrajaya today.

'And even now some sort of dialogue is going on, but the crimes committed by the Zionist regime have overshadowed all our considerations,'' he said in a reference to Israel's campaign in Lebanon.

Israel's offensive against Hizbollah in Lebanon has killed more than 900 people and wounded 3,000 with a third of the casualties children under 12, according to Lebanese Prime Minister Fouad Siniora.

Ahmadinejad, who was in Malaysia to attend a meeting of Muslim nations that called for an immediate, unconditional ceasefire in Lebanon, said Iran was working on nuclear technology for use as alternative fuel for lighting and heat.

He took a swipe at Western charges that his country was developing the fuel for use in warheads.

''We are of the view that America and Britain, because of the crimes they have committed, don't deserve to be members of the Security Council,'' he said, speaking in Farsi through an interpreter.

Asked specifically whether Iran would respond by the August 31 deadline, he said: ''All the programmes that we have announced already we will follow up, but with a minor difference.

''Still we are in the process of consideration, but what has taken place in Lebanon made us more attentive to the case and to be more considerate of that. And bear in mind that most of the time of most of the politicians today is expended in the issue of the Lebanese crisis.'' Before the vote, Iranian parliamentarians said they could respond to a tough U.N. resolution by drafting a bill to follow North Korea out of the nuclear Non-Proliferation Treaty.

However, no such threats have been made since the Security Council approved the resolution on Monday by a 14-1 margin.

REUTERS DKB PC1911