TEHRAN (Reuters) -Iran insisted on Sunday that it wanted to return to nuclear negotiations with the European Union but gave no ground on the EU”s key demand that it halt all nuclear fuel processing before talks can resume.

Britain, France and Germany have said they want Iran to halt uranium processing at its Isfahan plant which Tehran resumed in August.

Otherwise, the EU trio say, they will back Washington”s efforts to haul Iran before the U.N. Security Council where it could eventually face sanctions. Iran says its nuclear programme will only be used to generate electricity, not make bombs.

&#34We are ready to continue unconditional talks and hope to reach a result through talks and avoid the Council,&#34 Foreign Ministry spokesman Hamid Reza Asefi told a news conference.

Almost two years of talks between Iran and the EU broke down in August when Tehran broke U.N. seals at the Isfahan plant where uranium is converted into a gas that can be used to make nuclear reactor fuel or bomb warheads.

&#34Iran will never again suspend Isfahan facility”s activities. It was a voluntary measure and was lifted automatically,&#34 Asefi said.

Washington and the EU are trying to persuade the governing board of the International Atomic Energy Agency (IAEA) to send Iran to the Security Council in November for violating international nuclear obligations.

U.S. Secretary of State Condoleezza Rice failed on Saturday to win Russia”s support for referring Iran to the Council, but said Washington still expects to be able to refer Tehran to the Council &#34at a time of our choosing&#34 if diplomatic efforts fail.

Rice flew to Moscow on a surprise trip on Saturday to press President Vladimir Putin to commit to backing a referral if Iran continues to defy the West, diplomats said.

But with Russia leery of punitive measures against a country it has strong commercial ties with, Putin was unmoved and reaffirmed Russia”s position that the IAEA must deal with Iran.

Rice acknowledged Putin did not change his mind and she settled instead for accepting Moscow”s pledge to work on coaxing Iran back to the talks with the EU over curbing its programmes.

Asefi said there was no legal basis for Iran”s case to be referred to the Council, adding that Iran had little to fear from referral to the Council.

&#34The Council cannot be used as a Sword of Damocles against Iran. We cannot be threatened by referral,&#34 he said.

Former President Akbar Hashemi Rafsanjani said on Saturday Iran was ready to resolve the nuclear impasse through diplomacy.

&#34Tehran is ready to begin talks on the country”s nuclear dossier without any preconditions,&#34 Rafsanjani was quoted as saying by the official IRNA news agency.

Iranian media have speculated that Rafsanjani has been authorised by Supreme Leader Ayatollah Ali Khamenei to lead Iran out of the nuclear standoff.