TEHRAN, June 14: Iran ruled out suspending sensitive nuclear work on Saturday, rejecting an offer by six world powers of trade and other benefits to try to coax it into stopping activities the West fears are aimed at making bombs.

But Iranian officials and the EU’s top diplomat Javier Solana still agreed in meetings in Tehran to press ahead with efforts to find a diplomatic solution to a standoff that according to some analysts has helped push oil prices to record highs, sources said.

“A new diplomatic path has been opened ... this will be a basis for fresh nuclear talks,” an Iranian official, who declined to be named, said. A European diplomat said: “Both sides agreed to remain in contact and continue working.”

But there was no indication the two sides had bridged their differences on the issue at the centre of the dispute – Iran’s refusal to heed UN demands to halt nuclear enrichment.

The United States and its European allies have warned of more sanctions against the Islamic Republic if it rejects the package of incentives presented to Tehran by Solana.

The world’s fourth-largest crude producer says it will not stop activities it says are for generating electricity.

“Iran’s view is clear: any precondition is unacceptable,” government spokesman Gholamhossein Elham said when asked about the offer by the United States, China, Russia, France, Britain and Germany.

“If the package includes suspension (of nuclear work) it is not debatable at all,” he told reporters. Although Iran has not officially rejected the offer, US

President George W. Bush said he was disappointed when asked about Elham’s statement during a visit to Paris.

“I am disappointed that the Iranian leaders rejected this ‘generous’ offer out of hand,” Bush told a joint news conference with French President Nicolas Sarkozy, adding it was a sign that Iran’s leadership was “willing to isolate its people further”.

Elham was speaking shortly after Solana, the European Union’s foreign policy chief, presented the world powers’ proposal to Iranian Foreign Minister Manouchehr Mottaki.

The offer, including civilian nuclear cooperation, is a revised version of one rejected by Iran two years ago and diplomats have played down any hopes of a breakthrough.

Mottaki suggested Iran was ready to engage in negotiations but linked its response to the major powers’ incentives to their reaction to Tehran’s own package of proposals aimed at defusing the row, submitted to the EU and others last month.

“It is natural that Iran’s response ... will depend on the logical and constructive response of (the six powers) to the Iranian package,” Mottaki said, according to IRNA news agency. Diplomats claim Iran’s package ignored concerns about its uranium enrichment programme.

But the Iranian official who spoke on condition of anonymity said the two sides saw “common points” in their proposals.

Solana said on Friday the offer, which he described as ‘generous’, would support Iran in developing a modern nuclear energy programme and also covered political and economic ties.

Iran’s refusal to stop enrichment has drawn three rounds of UN sanctions since 2006.Tehran has shrugged off the impact of such measures, saying it earned $70 billion in oil revenue last year.—Reuters