Iran (search) said Saturday it would reject any proposal to stop uranium enrichment for nuclear fuel, the central part of a package Washington's European allies are proposing to avoid a showdown over Iran's nuclear program.

The European countries notified the United States on Friday that they intend to offer Iran a package of economic incentives next week in hopes of persuading the country to permanently give up uranium enrichment, a technology that can be used to make nuclear weapons.

While the U.S. administration did not endorse the offer to Tehran (search), they also did not try to stop the Europeans, said a U.S. official, who spoke Friday on condition of anonymity. The U.S. is pushing for U.N. sanctions against Iran.

"Iran will not accept any proposal which deprives it of the legitimate right to the cycle of (nuclear) fuel," state-run television quoted Hossein Mousavian, a top nuclear official, as saying.

However, Mousavian, Iran's chief delegate to the International Atomic Energy Agency (search), said his government would study any proposal that would allay concerns over its nuclear program as long as it respected Iran's right to enrich uranium.

The key European powers agreed with the U.S. administration at a three-hour State Department meeting Friday that the package would be Iran's final chance to avert a showdown at the U.N. nuclear watchdog International Atomic Energy Agency, a U.S. official said.

Diplomats close to the talks said the European package of incentives included fuel for Iran's civilian programs and a trade arrangement with the European Union.

The U.S. government has lacked the necessary votes on the Security Council to impose sanctions because Britain, France and Germany were negotiating with Tehran in search of a compromise.

Last month, the IAEA's board of governors unanimously passed a resolution demanding Iran freeze all work on uranium enrichment, including uranium reprocessing and building centrifuges used to enrich uranium. The IAEA will meet Nov. 25 to judge Iran's compliance.

Iran has said the agency has no authority to ban it from enriching uranium, a right granted under the Nuclear Non-proliferation Treaty (search). But the country is under intense international pressure to suspend such activities as a good-faith gesture.

Defying the IAEA call, Mousavian told the AP earlier this month that Iran has converted a few tons of raw uranium into a hexafluoride gas, a stage prior to actual uranium enrichment.

Uranium hexafluoride gas is the material that, in the next stage, is fed into centrifuges used to enrich uranium. Uranium enriched to a low level is used to produce nuclear fuel to generate electricity, and enriched further can be used to manufacture atomic bombs.