Iran vows "no surrender" in face of new sanctions

His tough language was echoed by another senior official, who said mastering the nuclear fuel cycle was a "red line" from which Iran would never retreat.

Iran is embroiled in an escalating dispute with the West over its nuclear program, which Washington and other capitals suspect is a cover for plans to make atomic weapons, a charge Tehran denies.

Six major powers -- the United States, Britain, France, Germany, Russia and China -- are considering toughening sanctions against Iran for refusing to suspend uranium enrichment, which can be used in bombs or for peaceful ends.

"You all sit together and exchange papers," President Mahmoud Ahmadinejad said in a speech at a rally in Yazd province in central Iran, broadcast live on state television.

"But you are wrong. You are isolating yourselves," he said. "If you think ... you can make the Iranian nation surrender, you are wrong."

As he spoke, the crowd chanted: "Nuclear energy is our obvious right."

No date has been set for a vote on the proposed new sanctions, but envoys at the United Nations Security Council hope it could take place at the weekend.

The resolution is a follow-up to one adopted by the Security Council on December 23 that imposed trade sanctions on sensitive nuclear materials and technology and froze assets of key Iranian individuals, groups and businesses.

The new measures are expected to include an embargo on Iranian conventional arms exports, a ban on new commitments for government loans and an asset freeze on an expanded list of Iranian officials and firms associated with the country's nuclear program, diplomats at the United Nations said.

Earlier proposals for a mandatory arms embargo and restrictions on government insurance and credits to firms doing business in Iran have been dropped, the envoys said.

Iran, the world's fourth largest oil exporter, insists it wants only to generate electricity, and Ahmadinejad made clear it would not halt uranium enrichment. "The Iranian nation will completely defend all of its rights."

Ali Akbar Velayati, adviser on international affairs to Supreme Leader Ayatollah Ali Khamenei, Iran's most powerful figure, said the national interest and future development depended on nuclear energy.

"The Iranian people will not give that up," he told the official IRNA news agency. "The fuel cycle is Iran's red line on the nuclear issue. The Islamic Republic of Iran will never retreat from this red line." Reuters