Iranian officials said a simultaneous exchange of uranium inside Iran would garantee that Tehran would receive the fuel required for its research reactor.

"The guarantee sought by the Islamic republic is to have simultaneous exchange of fuel in Iran," vice president and atomic chief Ali Akbar Salehi told the official IRNA news agency.

"We will not accept any imposed conditions and we will also not accept that we are treated as an exceptional case," he said.

Foreign ministry spokesman Ramin Mehmanparast said Tehran is ready to send off its 3.5 percent low-enriched uranium (LEU) but would want a simultaneous exchange on its soil with 20 percent pure uranium processed abroad.

"Iran is not opposed to sending uranium abroad, but is considering how to do that," Mehmanparast told a news conference.

He said Tehran wanted a "100 percent guarantee" that it would receive the fuel required for its research reactor and "one of the guarantees is a simultaneous exchange of fuel inside the country."

Iran and world powers have been at loggerheads for weeks, failing to reach a nuclear fuel deal aimed at allaying Western concerns over Tehran's nuclear programme.

The West, led by Washington, fears Iran might otherwise covertly divert its LEU for further enrichment to the much higher levels required for a bomb, an ambition Iranian officials strongly deny.

Enrichment of uranium lies at the heart of the controversy, as the material can be used to power nuclear reactors as well as to make the core of an atom bomb.

In Jerusalem, visiting German Foreign Minister Guido Westerwelle said on Tuesday that an nuclear-armed Iran "is not acceptable."

"It is an issue that concerns the entire international community" and not just Israel, adding "the security of Israel is not negotiable, particularly for us," he added.

Israeli President Shimon Peres also urged Germany to keep the pressure on Iran.

"Threats of destruction, denying the Holocaust, massive funding and supporting terrorist organisations including Hezbollah in Lebanon and Hamas in Gaza, are serious and can't be ignored," Peres said.

Germany is one of the six world powers negotiating with Iran over its nuclear programe.

To defuse the crisis, the UN atomic watchdog brokered a deal last month under which Iran would send 1,200 kilograms (2,640 pounds) of LEU, or 70 percent of total stocks as of October, to Russia and then France for conversion into fuel required for the internationally supervised Tehran reactor.

But Iran has rejected that deal amid stiff opposition from senior officials who oppose sending the LEU in one go. They fear the West might renege on its side of the bargain.

Mehmanparast underscored that, saying Iran wanted such a guarantee because "the countries we are dealing with do not have good records in our public opinion."

"They have not lived up to their expectations and it has kind of created mistrust."

Nuclear negotiator Ali Bagheri too insisted on a simultaneous exchange of uranium.

"They (world powers) said that our 1,200 kilogrammes of 3.5 percent enriched uranium should be transported for further enrichment to 20 percent level by Russia and then to be converted into fuel by France for the Tehran reactor," Bagheri told hardline newspaper Kayhan.

"Iran has no problem in transporting its 3.5 percent LEU, but needs a 100 percent guarantee it will get the fuel for the Tehran reactor and one of the guarantees is the simultaneous exchange of fuel inside Iranian territory," added Bagheri, who is also deputy secretary of Iran's powerful Supreme National Security Council.

Atomic chief Salehi said there were other ways by which Tehran can procure the fuel, including making its own.

"We have the potential to make the fuel for Tehran reactor legally and technically, but we prefer it to be provided from outside Iran," he said.

World powers, who still hope Tehran will accept the UN-drafted deal, have threatened to levy fresh sanctions against Iran if it fails to come clean on its atomic programme.

The United States and Iran's arch-foe Israel have not ruled out military action against Tehran to halt its galloping nuclear drive.

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