Launching an urgent appeal for dialogue between Islam and Christianity, Khatami told an audience at the World Council of Churches (WCC) that Iran's dominant Islamic faith ruled out the use of nuclear weapons.
"We cannot seek nuclear weapons because of our religious faith, I told our religious leaders," he said, speaking through an interpreter.
"The Islam that I know does not allow the use of nuclear weapons, then we cannot go ahead and manufacture them," the Iranian president added in response to questions.
Khatami's comments came a day after Iran said it had given the International Atomic Energy Agency (IAEA) the formal go-ahead to carry out more intrusive inspections of its suspect nuclear programme.
The United States has voiced concern that the Islamic republic is using a civil atomic energy programme as a cover for secret nuclear weapons development.
During his address to a seminar on religious tolerance organised by the WCC, which groups the world's Christian and Orthodox faiths with the exception of the Roman Catholic church, Khatami also gave an unusually frank endorsement of western democracy.
"I think democracy is the only alternative, we can take it as Muslims," he said.
"We must accept this has been materialised in the West, we must accept this as Muslims," Khatami added, warning that the alternative was authoritarian and despotic rule.