Tehran is reported to have rejected a Russian proposal for a compromise on Iran's intention to enrich uranium. New York Times said, "Iran also made a vague threat to drop out the Nuclear Nonproliferation Treaty over the decision by the United Nations'  nuclear monitoring body to forward its case to the Security Council.

The comments came after  Iran's first official reaction since last week, when it became clear that the International Atomic Energy Agency (IAEA) would send Iran's case to the Security Council. Hamidreza Assefi, a Foreign Ministry spokesman said:

"We told the Russians that we would not give up our research and development program and the proposal is ruled out if this part of our plan is ignored". Moscow had offered to enrich uranium for Iran for use for energy purposes if Iran would refrain from doing so.

But it  made a last-minute face-saving offer to allow Iran to continue some enrichment eventually for research purposes but withdrew the offer under Western pressure.

As per NYT, Foreign Minister Manouchehr Mottaki warned on Sunday on the sideline of conference on energy and security that Iran might drop out of the Nuclear Nonproliferation Treaty.

"If we reach a point where the existing mechanisms do not provide for the right of the Iranian people, then the policies of the Islamic Republic of Iran would be possibly revised and reconsidered," he said in response to a question about whether Iran would withdraw from the treaty.

Mr. Assefi said, however, that withdrawing from the treaty "was not on Iran's agenda yet."

The United States and Europe, which contend that Iran is seeking to develop nuclear weapons, last week said they were opposed to a possible compromise on the Russian deal that would allow Iran to maintain its experimental research program. Iran says that its nuclear program is completely for peaceful purposes.
Secretary of State Condoleezza Rice, speaking on her plane returning from Santiago, Chile, said  on Sunday that she was not surprised at Iran's comments:

"I think the Iranians have said a number of times that they were interested, they were interested, but they really never demonstrated that they were interested in the Russian proposal as the Russians had actually put it forward," she said. "So I don't think it's very surprising."

Ms. Rice rebuffed a suggestion from Russia that there should be further discussions among leading members of the Security Council in Vienna to avert a confrontation with Iran.
 "I think the discussions are now in New York," Ms. Rice said.  She added that it had always been the understanding of Russia, Europe, China and others that once the International Atomic Energy Agency referred Iran's case to the Security Council for possible punitive action, discussions should begin there in early March.

The United States is seeking a so-called presidential statement at the Council calling on Iran to resume its suspension of uranium-enrichment activities. Such a statement would not require a vote but would be adopted by consensus.
Iran has argued that the nonproliferation treaty gives the country the right to conduct nuclear research.
Full story: http://www.nytimes.com/2006/03/13/international/middleeast/13iran.html?_r=1&oref=slogin