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VIENNA - Iran's president said Tuesday he will submit new proposals in negotiations over his country's nuclear program but denounced a European offer of aid as an "insult," as the U.N. nuclear agency tried to resolve the crisis without referring Tehran to the Security Council.
While the International Atomic Energy Agency's 35-nation board considered a new warning to a defiant Iran to suspend its atomic activities, fresh areas of concern emerged Tuesday.
An exiled dissident said Iran recently produced 4,000 centrifuges capable of enriching uranium to weapons grade. Alireza Jafarzadeh, who helped uncover details of Iran's program in 2002 that fueled U.S. suspicions the country was trying to build a nuclear bomb, said the centrifuges are ready to be installed at the nuclear facility in Natanz.
In Tehran, Iran announced it has improved the range and accuracy of its Shahab-3 missile. It said the weapon can strike targets 1,200 miles away - a statement sure to unnerve Western officials who fear the regime one day will be able to fit such missiles with nuclear warheads.
Mahmoud Ahmadinejad, the country's new president, spoke Tuesday with U.N. Secretary-General Kofi Annan and said Iran was willing to continue talks with the Europeans.
"We are ready to proceed with talks. Of course, I will put forward initiatives in this respect after forming my Cabinet," Ahmadinejad told Annan.
But Ahmadinejad is bringing in one of the most hard-line elements in the Islamic regime to head the talks - another sign Iran has grown more willing to defy the West in pursuing its nuclear program since he was elected president in June, replacing reformist President Mohammad Khatami.
President Bush said he was "deeply suspicious" of Iran.
"Iranians are getting a message, that it's not just the United States that's worried about their nuclear programs, but the Europeans are serious in calling the Iranians to account and negotiating," he said from Texas.
Bush said if Iran does not cooperate, United Nations sanctions are "a potential consequence."
However, diplomats said there was little stomach for reporting Tehran to the Security Council, in part out of fears that such a move might inflame support within Iran for the regime's nuclear ambitions.
Envoys from some nations whose own nuclear activities have come under scrutiny, such as Brazil and Argentina, also appeared reluctant to subject Iran to measures that could be applied to their programs one day.