In a speech to members of the hardline Basij militia, the austere hardliner also played down an international outcry over his controversial call for Israel to be "wiped off the map" by insisting what he said was nothing new.

Although the president lashed out at what he called "an illegal occupying regime", he did not repeat his call for Israel to be destroyed and the foreign ministry also kept up its effort to limit the diplomatic fall-out.

Ahmadinejad's use of the revolutionary-era slogan, which has not been employed by senior regime officials for years, has renewed concerns over the Islamic republic's bid to make nuclear reactor fuel -- work that could potentially be diverted to make weapons.

But the president, who won a shock election victory in June, maintained his uncompromising stance in the face of Western demands that Iran abandon such technology.

"We support the resumption of work at the UCF (uranium conversion facility) and we will continue," Ahmadinejad said, rejecting demands that Iran return to a full freeze agreed to in November 2004 in a deal with Britain, France and Germany.

"The previous government backed down in the name of confidence building so much that they voluntarily suspended the fuel cycle," he complained. "Recently the government realised that this confidence building claim is wrong."

In August, Iran refused an EU offer of trade and other incentives in exchange for halting uranium enrichment work and resumed uranium conversion.

The country insists it only wants to generate electricity, but last month the International Atomic Energy Agency (IAEA) found Iran to be in "non-compliance" with the Non-Proliferation Treaty (NPT) -- paving the way for a Security Council referral -- and urged Iran to return to a full suspension.

The next IAEA meeting is just a month away.

But reacting to Western pressure against Iran, Ahmadinejad said: "They are lying and they don't want the Islamic republic to have the fuel cycle."

Enrichment work, Ahmadinejad insisted, was "100-percent lawful and there was no deviation" towards military purposes.

"It is a big lie that Iran has concealed things for 18 years," he asserted, even though Iran has openly admitted having failed to report the full scale of its nuclear activities and black market shopping to the International Atomic Energy Agency (IAEA).

Iran came clean on its activities in 2003, maintaining that it had been left with no choice but to conceal given the country is subject to almost constant US pressure and sanctions.

An IAEA probe has since found evidence of suspect activities but no "smoking gun" that proves a weapons drive.

Speaking with a Palestinian scarf around his neck and flanked by sandbags, Ahmadinejad also brushed off condemnation of his fiercely anti-Israeli speech, which was given Wednesday to a conference entitled "A World without Zionism".

"We only repeated the words of the last 27 years which were the stances of the Imam, and the supreme leader and Islamic nation. It was very clear," Ahmadinejad said, in what could be interpreted as an effort to calm the storm.

But he nevertheless went on to blast efforts "to make the world recognise the existence of an illegal occupying regime", drawing chants from the audience of "Down with Israel!"

"Today, under the pretext of the Gaza pullout, they want to force a few countries to recognise this country. The ones who do that must know that they are standing in front of Islamic nations and that it is an unforgivable crime."

The Iranian foreign ministry also kept up its efforts to ease tensions, the day after asserting the Islamic republic was not out to attack Israel.

"The position of the Islamic republic regarding the illegal Zionist regime has been very clear since the Islamic revolution (in 1979): we do not recognise this regime and that is our diplomatic right," foreign ministry spokesman Hamid Reza Asefi told the official news agency IRNA.

"We want free elections in the occupied Palestinian territories with the participation of all inhabitants, be they Jews, Muslims or Christians."

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