Iran sees U.S. respect but says no nuclear retreat

TEHRAN (Reuters) - Iranian President Mahmoud Ahmadinejad on Wednesday praised U.S. participation in last week's talks with Tehran on its disputed nuclear program as "a positive step" and said its arch foe had shown respect.

"I advise you not to spoil this positive step ... by using the language of colonial times and by bullying," Ahmadinejad said in a speech broadcast live on state television.

But Ahmadinejad, who was unusually complimentary in his comments about a representative of a country Iran's clerical leaders see as "the Great Satan", made clear Tehran would not halt atomic work the West suspects is aimed at making bombs.

At Saturday's meeting with Iran's chief nuclear negotiator in Geneva, six world powers gave Iran two weeks to answer calls to rein in its nuclear activities or face more sanctions.

"If you imagine that by some threats, sanctions and pressure you can make the Iranian nation retreat, you are again making a mistake," Ahmadinejad said in the southern city of Yasuj.

In a shift of policy, senior U.S. diplomat William Burns joined European Union foreign policy chief Javier Solana and envoys from China, Russia, Britain, France and Germany for the one-day meeting on July 19.

Some Iranian media said this was a victory for Iran.

U.S. Secretary of State Condoleezza Rice on Monday said Iran must give a "serious answer" within the deadline set by major powers, which have offered trade and technical incentives if Tehran halts uranium enrichment. She said Iran's envoy to the talks, Saeed Jalili, did not address the sextet's offer.

U.S. ENVOY "DIGNIFIED"

Ahmadinejad said the talks in Geneva were "good".

He said Iran wanted negotiations but urged major powers to approach his country respectfully and without threats.

Referring to Burns, Ahmadinejad said: "Their representative in the meeting spoke politely and in a dignified way and he kept respect for the Iranian nation and this was a positive step."

Addressing Washington, he added: "You have taken a positive step towards recognizing the right of the Iranian nation, towards justice, towards repairing (America's) image in the world, towards attracting the attention of the Iranian nation."

Washington is considering whether to open an interest section in Tehran, which would allow for diplomatic contact while falling short of diplomatic ties.

The New York Times published details of a paper it said Iran presented in Geneva that called for three more rounds of talks with Solana and at least four more at ministerial level.

It did not mention a call for Iran to freeze its nuclear work in return for halting steps towards more U.N. sanctions, which is what world powers proposed to prepare for formal talks.

"The parties will abstain from referring to or discussing divergent issues that can potentially hinder the progress of negotiations," the Iranian paper said, according to the report posted on the Times' Web site on Tuesday.

Iran says its nuclear work is a peaceful drive to generate electricity so the country, the world's fourth-largest crude producer, can export more of its oil and gas.

It has repeatedly ruled out suspending uranium enrichment, as the powers say it must do before formal negotiations on their offer can start. Enriched uranium can provide fuel for power plants but also material for weapons if greatly refined.

(Writing by Fredrik Dahl and Edmund Blair; Editing by Janet Lawrence)