U.S. warns defiant Iran ahead of Solana trip

TEHRAN (Reuters) - The United States warned a defiant Iran on Wednesday that "all options are on the table" to thwart its nuclear ambitions and the EU's top diplomat prepared to travel to Tehran in the latest bid to resolve the dispute.

As part of carrot-and-stick diplomacy, European Union foreign policy chief Javier Solana said he would be in Iran on June 14-15 to discuss an offer by major powers of trade and other benefits if it halts uranium enrichment.

But the Islamic Republic made clear it had no intention of bowing to international demands and halting a nuclear program which it says is aimed at generating electricity but which the West fears is a covert drive to build bombs.

President Mahmoud Ahmadinejad said Western pressure had failed to stop Iran's nuclear activities.

"With God's help today (the Iranian nation) have gained victory and the enemies cannot do a damned thing," he said in a speech broadcast live on state television.

The U.N. Security Council has imposed three rounds of limited sanctions on Iran since 2006 over its refusal to suspend nuclear enrichment, which can provide fuel for power plants or material for weapons if refined much more.

This week U.S. President George W. Bush said an "Iran with a nuclear weapon would be incredibly dangerous for world peace". On a farewell tour of Europe he threatened Tehran with more sanctions if it failed to stop enriching uranium.

Bush, who met German Chancellor Angela Merkel north of Berlin as part of his week-long tour of Europe, is pressing allies to agree new punitive measures against Iran.

While Europeans have voiced support for such steps, they are also looking past Bush, whose presidency ends in January.

"Both the chancellor and my first choice, of course, is to solve this diplomatically," Bush told a joint news conference with Merkel. But he added: "All options are on the table", a reference to the threat of military action.

U.S. Secretary of State Condoleezza Rice said of the new offer of incentives to Iran: "I am going to be attentive to, and I think others will be attentive to, any sense that Iran is trying to use this opportunity before them to stall because I think no one is of a mind to allow them to stall."

DIPLOMACY

Ahmadinejad, speaking in a western province, said the Bush "era" had ended and promised that Iran's foes would not be able to "harm even a centimeter" of its territory.

Defense analysts say the United States could unleash vastly superior firepower in any attack on Iran but that Tehran could hit back against U.S. forces in Iraq and disrupt oil supplies crucial to the world economy.

In Brussels, Solana said he hoped his trip to Tehran would start a new process for resolving the standoff diplomatically, but he has played down any prospect of a breakthrough.

"We hope very much there will be a positive outcome of the visit and that it will not be just one visit, that it will be a process that restarts again in trying to find a diplomatic solution to the crisis," he told reporters.

The five permanent members of the U.N. Security Council -- the United States, Britain, France, Russia and China -- and Germany agreed last month on an enhanced package of incentives to coax Iran into giving up nuclear enrichment.

Iran spurned a 2006 offer from the six powers which included civil nuclear cooperation and wider trade in civil aircraft and has in recent months dismissed any talk of suspending its atomic work in exchange for economic and other benefits.

A Western diplomat told reporters the new package was "not dramatically different" to the 2006 offer, and Solana would be accompanied by senior officials known as political directors from each of the six major powers except the United States.

"Personally, I expect nothing of this visit," the diplomat said, adding that Iran had shown no sign that it was prepared to enter negotiations.

"The Russians and the Chinese demanded that since we imposed sanctions, we should also show that we want to negotiate," he said, adding: "I would say that out of the six there are four who think that this trip is not necessary. But Russia and China are insisting, so we are going."

Iran, which says it earned about $70 billion in oil revenue last year, has shrugged off the impact of sanctions.

(Additional reporting by Zahra Hosseinian in Tehran, Matt Spetalnick and Kerstin Gehmlich in Meseberg, Germany, and William Schomberg and Ingrid Melander in Brussels; editing by Andrew Roche)