Aug. 21 (Bloomberg) -- Iran rejected the suspension of its uranium enrichment program, the main objective of a European Union-led offer of incentives to which the country is due to give a formal reply tomorrow.

``Under current circumstances, the suspension of uranium enrichment is not possible,'' Mohammad Saeedi, deputy head of Iran's Atomic Energy Organization, told state-run Fars News. The Iranian government's reply will be ``very comprehensive and give a suitable opportunity for the West to solve the nuclear dossier through negotiations,'' Saeedi said.

Enriched uranium can be used to fuel a power plant, and at higher concentrations can form the core of a bomb. The U.S. suspects Iran's uranium enrichment program is aimed at building a weapon, in contravention of the Non-Proliferation Treaty, to which Iran is a signatory. Iran says the fuel is needed to produce nuclear power.

The United Nations Security Council has given Iran until Aug. 31 to accept the EU-led proposal of incentives, and suspend uranium enrichment, or face the threat of economic sanctions. The Security Council resolution came after Iran ignored calls to suspend its enrichment work and give a prompt reply to the proposal.

Iran began a new round of enrichment June 6, the day the incentives were delivered in Tehran, the UN's International Atomic Energy Agency said.

Access Refused

IAEA inspectors were refused access to Iran's underground nuclear site at Natanz, a possible violation of the Non- Proliferation Treaty, the Associated Press reported today, citing unidentified diplomats in Vienna, where the IAEA is based. Details of the incident weren't immediately available.

The IAEA isn't commenting on the reports ahead of the release of its comprehensive report on Iran's compliance with IAEA demands sometime next week, spokeswoman Melissa Fleming said in a statement.

Nancy Beck, a U.S. State Department spokeswoman, said the U.S. couldn't immediately confirm the report.

The incentives are supported by all five of the Security Council's permanent members -- the U.S., U.K., France, Russia and China -- plus Germany. The offer includes giving Iran access to light-water nuclear reactors, the lifting of some U.S. sanctions and help to join the World Trade Organization.

Heavy-Water Project

Iran is working on a heavy-water project in the city of Arak that will be operational ``soon,'' Saeedi said.

Iranian President Mahmoud Ahmadinejad has said Iran will respond to the incentives offer in detail tomorrow.

Iran's supreme leader, Ayatollah Ali Khamenei, ruled out suspension, the state-run Iranian Students News Agency reported earlier today. The Islamic Republic ``has made up its mind on the nuclear program and other issues it is faced with, and with God's help and with patience, will continue on its path with strength,'' he said.

The IAEA said June 8 that it can't be sure that Iran isn't hiding a nuclear-weapons program. Iran concealed nuclear work from IAEA inspectors for 18 years, until 2003. The agency is governed by a board of diplomats from 35 nations.

To contact the reporters on this story: Marc Wolfensberger in Tehran at mwolfens@bloomberg.net; Ladane Nasseri in Tehran at lnasseri@bloomberg.net

Last Updated: August 21, 2006 11:46 EDT