Iran says suspending atomic work unacceptable

TEHRAN, Feb 22 (Reuters) Iran cannot accept suspending uranium enrichment, as demanded by the UN Security Council, because it has no legal basis, a senior Iranian nuclear official said today in response to a UN nuclear watchdog report.

The International Atomic Energy Agency said today Iran had failed to meet a Feb. 21 deadline to halt enrichment, which can make fuel for power plants or material for warheads.

Its refusal to heed the demand exposes Iran to possible new sanctions, in addition to those imposed in December.

''Regarding the suspension mentioned in the report, because such a demand has no legal basis and is against international treaties, naturally, it could not be accepted by Iran,'' Mohammad Saeedi, deputy head of Iran's Atomic Energy Organisation, said.

''This report shows that the best way to resolve this international issue is to return to the negotiating table and reach a broad agreement,'' he told Reuters, describing the report as ''factual and legal'' and showing Iran's peaceful intentions.

He said the report showed Iran had informed the agency about the installation of new centrifuges and said they would be operating by May 2007.

The IAEA report had said Tehran had installed two cascades, or networks, of 164 centrifuges in its underground Natanz enrichment plant with another two cascades close to completion.

The country already runs around 350 experimental centrifuges used for enriching uranium.

''Another point of the report is that (IAEA head Mohamed ElBaradei) confirms that Iran has allowed the IAEA inspectors to have full access to its nuclear facilities and allowed the installation of cameras,'' Saeedi said.

REUTERS SAM PM2308