TEHRAN—The EU's top diplomat said he would hand Iran a generous offer on Saturday aimed at resolving a deepening dispute over its nuclear ambitions that has helped push up oil prices to record highs.
European Union foreign policy chief Javier Solana arrived in Tehran late on Friday to present an incentives package agreed by six major powers last month to coax Iran into halting atomic work the West fears is aimed at making bombs.
But with the Islamic Republic voicing defiance and showing no sign of backing down, diplomats played down the prospect of a breakthrough in the long-running standoff.
Solana, who has said he expects no "miracles", said the proposals would support Iran in developing a modern nuclear energy programme and also covered political and economic ties.
"I am travelling to Tehran to present a generous and comprehensive offer," he said in a statement on Friday.
"I am convinced that it is possible to change the present state of affairs," the Spaniard said. "Our proposal is good for the future of Iran and for the future of the Iranian people."
Iran has repeatedly rejected international demands to suspend uranium enrichment, saying its atomic drive is solely aimed at generating electricity so that the world's fourth-largest crude producer can export more oil and gas.
"The outcome of these negotiations will certainly never be Iran's surrender to degrading Western demands," senior cleric Ayatollah Ahmad Khatami told the IRNA news agency.
Seeking to step up the pressure, the United States and the 27-nation EU have warned of more sanctions if Tehran does not stop nuclear activities which can have both civilian and military uses.
'Incredibly Dangerous'
Tehran argues it is its right under international treaties to master the complete nuclear fuel cycle for civilian purposes—from mining uranium to enriching it. It aims to start test-running its first nuclear power plant at Bushehr this year.
Iran's refusal to stop enriching uranium, which can provide fuel for power plants or material for weapons if refined much more, has drawn three rounds of U.N. sanctions since 2006.
Tehran has shrugged off the impact of such measures, saying it earned $70 billion in oil revenue last year. But analysts say the nuclear row is hurting foreign investment in a country also struggling with 25 percent annual inflation.
Solana is due to meet Iran's Foreign Minister Manouchehr Mottaki and chief nuclear negotiator Saeed Jalili on Saturday for talks on the incentives package hammered out by the United States, China, Russia, Britain, Germany and France.
It is an enhanced version of an offer spurned by Iran in 2006, which included civilian nuclear cooperation and wider trade in aircraft, energy, high technology and agriculture.
Mottaki dismissed Western suspicions Iran is seeking to draw out the process while pushing ahead with its atomic activities.
"Iran is not seeking to gain time ... What motivates us is a desire to establish dialogue," he told French daily Le Monde.
Solana will be accompanied by senior officials from the major powers with the exception of the United States, which cut ties with Iran after its 1979 Islamic revolution.
U.S. President George W. Bush this week said a nuclear-armed Iran would be "incredibly dangerous for world peace" and that "all options are on the table", alluding to military action as a last resort to stop its nuclear programme.
Market concern that the dispute may lead to a disruption in Iran's crude exports have helped drive oil to record levels near $140 a barrel, hurting U.S. and other consumers.
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