VIENNA, (Reuters) – Iran vowed on Wednesday to press on with its nuclear fuel programme, ignoring a U.N. deadline to freeze uranium enrichment or face broader sanctions, but offered to guarantee it would not try to develop atomic weapons.

Iranian President Mahmoud Ahmadinejad remained defiant as a 60-day grace period Iran had been given on Dec. 23 to stop enriching uranium for nuclear fuel was expiring. “We … will continue our work to reach our right (to nuclear technology) in the shortest possible time,” Iranian student news agency ISNA quoted him as saying in the provincial town of Siahkal.

With the deadline running out, the International Atomic Energy Agency, which has been unable to verify Iran’s programme is wholly peaceful after three years of investigations, was expected to report to the U.N. Security Council by Thursday that Tehran was pursuing enrichment regardless of pressure to stop.

The West suspects Iran is trying to make atom bombs behind the facade of a civilian nuclear energy programme. Tehran says it wants only an alternative source of electricity so it can maximise oil exports and prepare for when oil reserves run dry. “Obtaining this technology is very important for our country’s development and honour. It is worth it to stop other activities for 10 years and focus only on the nuclear issue,” said Ahmadinejad.

A British Foreign Office official brushed off his comments. “He has been saying this over and over and over again. Iran needs to restore confidence in its intentions regarding its nuclear programme by complying fully with Security Council resolution 1737,” the official said.

The Council, which two months ago banned transfers of nuclear technology and expertise to Iran, could consider wider sanctions if Tehran does not freeze enrichment work by Feb. 21. But it will not take action before the next meeting of the IAEA’s 35-nation board of governors on March 5-9, leaving a little more time for dialogue to avert a feared U.S.-Iran conflict, said the diplomat close to the IAEA.

Ultimate authority on nuclear matters lies not with Ahmadinejad but Supreme Leader Ayatollah Ali Khamenei. But senior Iranian leaders have all ruled out halting nuclear work as a precondition for talks on trade benefits from the West. “We would give the necessary assurances and guarantees (in negotiations) that there will be no deviation ever towards nuclear weapons (in Iran),” chief negotiator Ali Larijani said in Vienna on Tuesday after talks with the IAEA director.

“Maybe there are certain groups or countries willing to coerce Iran … (but) Iran’s nuclear dossier cannot be resolved through force and pressure,” he said, alluding to the United States, which has built up strike forces in the Gulf near Iran.

Larijani said he had “constructive” talks with IAEA director Mohamed ElBaradei on ways of reviving talks with Western powers. ElBaradei has urged both sides to take a mutual “timeout” to enable talks — Iran would suspend enrichment rather than accelerate it from research level to “industrial scale” as planned at its Natanz plant, while sanctions would be suspended.

The diplomat close to the IAEA said Iranian officials were sounding positive in private about a “timeout” and hoped EU foreign policy chief Javier Solana, who led earlier talks with Larijani, would be uthorised to discuss it with him.

Western officials have dismissed previous such signs of Iranian flexibility as stalling while it strives to master enrichment technology at its underground Natanz complex, ringed by anti-aircraft guns against feared U.S. assault.

As a possible compromise to jumpstart negotiations, Larijani has suggested Iran could pledge to refine uranium no higher than the 4-5 percent level, sufficient for power plant fuel but far below the 80 percent needed for the fissile core of bombs. But diplomats and analysts have said there is no technical method to guarantee a cap on enrichment levels.

ElBaradei cites intelligence estimates that Iran remains 4-8 years away from learning how to build an atom bomb, assuming it wants one, leaving ample time for a diplomatic deal. He says neither sanctions nor war could erase Iranian nuclear ambitions.