Iran raised the stakes in the dispute last week by removing UN seals to gain access to equipment that purifies uranium, which can be used for power or, if highly enriched, in bombs.

The move prompted the United States and the European Union's three biggest powers -- Britain, France, and Germany -- to say the time had come to refer Iran's case to the UN Security Council, where Tehran could face sanctions.

Iran says it has no intention of building nuclear arms and has a clear right as a signatory of the nuclear Non-Proliferation Treaty (NPT) to develop a full nuclear programme for peaceful purposes.

"Diplomacy is the only clear answer to the current situation," Foreign Ministry spokesman Hamid Reza Asefi told a weekly news conference.

"There is no legal basis for referring Iran to the Security Council. But if that were to happen Iran is not afraid," he said.

Asefi declined to clarify whether Iran planned to carry out small-scale uranium enrichment -- the most sensitive part of the atomic fuel cycle -- as part of its research work.

"Iran's decision to resume nuclear research activities is irreversible," he said.