Iran wants more steps from U.S. to ease tensions

TEHRAN (Reuters) - Iran's president said on Tuesday a U.S. intelligence report saying Tehran had halted a nuclear weapons program in 2003 was "positive" and he urged Washington to take more steps to end years of disputes.

But Mahmoud Ahmadinejad also told the United States and other world powers, who hold talks on Tuesday, that imposing more sanctions over Tehran's nuclear program would have no legal basis and insisted Iran would not stop its atomic work.

Ahmadinejad told a rally last week that the publication of the U.S. National Intelligence Estimate, which said Iran halted a nuclear weapons program in 2003, was a "victory" for Iran.

His comments on Tuesday were more measured and come before more talks between U.S. and Iranian officials in Baghdad, expected in December, to discuss Iraqi security.

"We evaluate this (report) as a positive step, and a step forward and if they take one or two more steps the situation will be totally different ... the road will be paved for resolving regional and international issues," he said.

Ahmadinejad, who usually rails against Washington, said one more gesture the United States could take would be to "respect the rights" of regional countries and another would be to declare the nuclear issue "finished".

Washington is pushing for more sanctions on Iran despite the U.S. intelligence report, which also said Tehran was continuing to master skills needed to make nuclear weapons. U.S. President George W. Bush said Iran was still a danger.

The United States, Russia, China, France, Britain and Germany will hold talks on Tuesday over finalizing the text of a third U.N. sanctions resolution against Iran which could be voted on in the coming weeks, Washington said.

"We think that any such measures (for new sanctions) has lost its legal basis," Ahmadinejad said.

CHANGE IN BEHAVIOUR

Iran insists its nuclear program is peaceful and designed for electricity. It says it has never had a nuclear weapons program. Ahmadinejad said if the U.S. intelligence agencies "studied the matter more closely" they would see that too.

Ahmadinejad also noted a report by the U.N. International Atomic Energy Agency which said Iran was cooperating in clearing up queries about its nuclear plans.

"We had two rounds of sanctions and what happened? Nothing," he said. "Now is the time for them to change their behavior."

The president has been attacked by opponents in Iran for provoking the West to press for sanctions with fiery speeches. Former President Mohammad Khatami criticized his policies -- without naming the president-- on Tuesday.

"We should not provoke the world but at the same time we should insist on our rights. We should not welcome threats but not lose opportunities," he told students at Tehran University.

Iran regularly calls for a change in behavior from the United States, which cut diplomatic ties in 1980 after radical students seized the U.S. embassy and took diplomats hostage during the 1979 Islamic revolution.

Exiled opposition group, the National Council of Resistance of Iran (NCRI), said Iran shut its nuclear weapons program in 2003 but restarted it a year later.

"This group cannot be the basis for correct information," Ahmadinejad said when asked about the accusation.

(Additional reporting by Hossein Jaseb; Writing by Edmund Blair; Editing by Stephen Weeks)