"We intend to continue our activity... until we manage industrial-scale production of nuclear fuel for our atomic power stations," Ahmadinejad said, according to the text of a speech he gave at a regional summit in Azerbaijan.

The Iranian president's comments in the Azerbaijani capital Baku came as Western powers, which fear Tehran secretly plans to build atomic weapons, pushed for a UN resolution requiring an end to uranium fuel enrichment.

Ahmadinejad told leaders from the Economic Cooperation Organisation (ECO), which includes five of Iran's neighbours, that "bullies are insolently trying to interfere in the internal affairs of other countries."

At a later press conference, he said that "two or three" countries dominated international institutions that were meant to be serving the world.

"They have nuclear weapons and they say that you can't even have nuclear fuel for civilian purposes. If it's bad, why do they have it? If it's good, why do they not allow us to?" he asked.

Accusing his Western opponents of mounting a "psychological war" to "laugh at Iran," he warned: "Let them look at where (Iran) is on the map and how big it is."

Ahmadinejad hailed his country's nuclear power project as "a great achievement for the whole region and the Islamic world."

But he also stressed Iran's desire to work under the scrutiny of the UN's International Atomic Energy Agency, which last week reported that Tehran had failed to comply with a demand to suspend uranium enrichment.

The Iranian president called for support from the ECO Group, which comprises ten overwhelmingly Muslim countries, including Iran's neighbours Afghanistan, Azerbaijan, Pakistan, Turkey and Turkmenistan.

"The constructive cooperation of ECO is a very important step," he said.

However, in a separate meeting Turkish Prime Minister Recep Tayyip Erdogan warned Ahmadinejad that the international community was resolute against the spread of atomic weapons.

"No country in the world will approve the proliferation of nuclear weapons," he was quoted as saying by the Anatolia news agency.

The United States and Europe allege that Iran is using the Russian-backed construction of a civilian nuclear power network as cover for a plan to acquire nuclear weaponry.

The draft UN Security Council resolution backed by Britain and France would oblige Iran to suspend uranium enrichment, the process creating fuel for reactors and -- potentially -- the core of an atomic bomb.

The proposed resolution refers to Chapter Seven of the UN Charter, which can authorize economic sanctions or military action as a last resort, but only warns of unspecified "further measures" requiring another resolution.

Iran says it needs enriched uranium as fuel for its civilian programme and defends the work as its sovereign right.

Neighbouring states are nervous about the potential fallout of economic sanctions or any other deterioration in the tense standoff.

"The most difficult situation will be for neighbouring countries," Azerbaijan's foreign minister, Elmar Mammadyarov, said Thursday.

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