TEHRAN, (Reuters) – Iran is pressing on with uranium enrichment “non-stop”, its envoy to the U.N. nuclear agency was quoted as saying on Saturday, despite a world powers’ offer of economic incentives to coax Tehran into halting such activities.

The Islamic Republic also appeared to dismiss any suggestion of freezing nuclear work it says is for generating electricity but which the West suspects is aimed at making bombs.

Six major powers, including the United States, last week offered Iran help in developing a civilian nuclear programme and other benefits in their latest attempt to resolve a long-running row that has helped pushed oil prices to record highs.

Iran’s chief nuclear negotiator said Tehran was ready to start negotiations “based on a win-win principle,” the official IRNA news agency said. But it “will not bow to any illogical demands that would deprive it of its rights to continue with its peaceful nuclear activities,” Saeed Jalili added.

The United States says it is focusing on diplomatic pressure to thwart Tehran’s nuclear ambitions but has not ruled out military action as a last resort.

The New York Times on Friday quoted U.S. officials as saying Israel had carried out a large military exercise, apparently a rehearsal for a potential bombing of Iran’s nuclear facilities.

The U.N. nuclear watchdog chief, Mohamad ElBaradei, the same day warned a military strike on Iran would turn the Middle East into a fireball.

Iranian government spokesman Gholamhossein Elham on Saturday branded Israel a “dangerous regime” but made clear his view it would not dare attack, when asked about the report.

Diplomats said on Friday the six powers had offered Iran preliminary talks on its nuclear programme, on condition it limit enrichment to current levels for six weeks in exchange for a freeze on moves towards harsher sanctions. They said European Union foreign policy chief Javier Solana conveyed the proposal during talks in Tehran on June 14 in which he presented a revised batch of incentives for Iran to stop pursuing technology that could yield atomic weapons.

Asked whether such a “freeze-for-freeze” proposal would be acceptable to Iran, Elham told reporters: “About suspension, it has been said that suspension of activities and suspension of enrichment is not a logical issue that would be acceptable and in any case the continuation of negotiations will not be based on enrichment suspension.”

Iran has repeatedly rejected the sextet’s precondition of a full suspension of enrichment-related activity before negotiations to implement the incentives, which include support in developing a civilian nuclear programme.

Iran says it will review the offer by the United States, Russia, China, Britain, France and Germany but that it will not stop enriching uranium, which can have both civilian and military uses.

Its refusal to do so has drawn three rounds of limited United Nations sanctions since 2006. “The Islamic Republic of Iran continues with enrichment non-stop,” Ali Asghar Soltanieh, Tehran’s envoy to the International Atomic Energy Agency (IAEA), told Iran’s state broadcaster in an interview.

Iran, the world’s fourth-largest oil producer, has steadily expanded enrichment capacity to 3,600 centrifuge machines.

Under the “freeze-for-freeze” proposal, it would not expand enrichment capacity by adding centrifuge machines for a six-week period, during which the powers would stop moves to sharpen the mild sanctions already in force, the diplomats said.

The interim period would enable “pre-negotiations” to agree parameters for formal negotiations to put the incentives into effect, once Iran has fully suspended enrichment, they said.

As a signatory to the nuclear Non-Proliferation Treaty, Iran insists it has the right to master the complete nuclear fuel cycle, including uranium enrichment, for peaceful purposes.