Iran won't retreat from atomic rights - president

TEHRAN, Oct 23 (Reuters) Iranian President Mahmoud Ahmadinejad said today Western powers were wrong if they thought Iran would retreat under political pressure from its nuclear plans, even as the country faces possible sanctions.

Iran faces the prospect of penalties after its case was sent back to the UN Security Council for failing to heed a UN demand to suspend uranium enrichment, a process the West believes Tehran is using to develop atomic weapons.

France, Britain and Germany are drafting a Security Council sanctions resolution. But Iranian officials have shrugged off the threat, and say Iran will press ahead with its programme.

''They (the West) should know that taking advantage of nuclear energy is the demand of all the Iranian nation ... All the Iranian nation insists on this right and will not retreat one iota,'' Ahmadinejad said in a televised speech.

''Our leader is standing strong and sturdy and our nation is standing unified and consolidated,'' he said in a town on the southern edge of Tehran.

Iran's Supreme Leader Ayatollah Ali Khamenei has the final say in nuclear and other matters. But, like Ahmadinejad, he has also insisted Iran will not give up its atomic plans.

Iran, the world's fourth largest oil exporter, insists it wants to produce fuel for nuclear power plants and dismisses charges it wants nuclear weapons.

France, Britain and Germany have been discussing the draft resolution with the United States, which wants tough action.

Russia and China, which can veto a UN resolution and are both major trade partners of Iran, are loathe to impose penalties.

Russian Foreign Minister Sergei Lavrov today noted that so far there was no resolution before the Security Council and there was still the possibility of an agreement with Iran which would ''open the way to negotiations''.

Lavrov was speaking at a joint news conference with EU commissioner for external relations Benita Ferrero-Waldner.

Ferrero-Waldner said: ''We do not want Iran to be a nuclear weapons state.'' He noted efforts to clinch a deal with Iran had, so far, failed and ''for the time being, there will not be another alternative other than exploring ways to work on the Security Council resolution''.

European states say measures will be incremental. Diplomats say steps are likely to initially target nuclear-related activities. Some European diplomats say a tough resolution could boost support for Ahmadinejad's conservative government.

''It (a tough resolution) would play right into the hands of the conservatives because they will have the perfect excuse for any economic failures,'' one European diplomat said.

Ahmadinejad won last year's presidential race pledging to share out Iran's oil wealth more fairly. Although he still draws enthusiastic crowds at rallies around the country, complaints about the economy, particularly rising prices, have increased.

REUTERS MQA RK1756