Tokyo: Iranian President Mahmoud Ahmadinejad has rejected a reported new package of incentives being worked on to entice Iran to suspend its nuclear enrichment programme, Japan's Kyodo news agency reported on Friday.

"This is a non-negotiable subject," Kyodo quoted Ahmadinejad as saying in an interview when asked his view on such an offer, reportedly being prepared by the five permanent members of the UN Security Council.

"Iran is a nuclear country and has no reason to give up the technology."

Iran says it wants to produce nuclear fuel only for electricity so it can export more oil. But it has been hit with three sets of United Nations sanctions for hiding the work until 2003, failing to prove to inspectors since then that it was wholly peaceful, and refusing to suspend the disputed programme.

The Washington Times reported last month that the five permanent UN Security Council members were preparing a package of incentives aimed at Iran's recently elected parliament, in hopes of ending Iran's uranium enrichment programme.

The proposal included economic, technological and security benefits, including help with developing a civilian nuclear energy programme, the paper quoted US and European officials as saying.

In February, EU foreign policy chief Javier Solana told Reuters the five major powers were discussing possible moves to draw Iran into negotiations.

Ahmadinejad told Kyodo the suspension of its uranium enrichment programme was an issue related to the past.

He repeated Iran's stance that it would pursue the nuclear issue only through the United Nation's nuclear watchdog agency, the International Atomic Energy Agency (IAEA).

Diplomats said on Thursday Iran has begun installing advanced centrifuges in its uranium enrichment complex, accelerating activity that could give it the means to make atom bombs in future.

Pause

After a pause of several months, Iran has now assembled more than 300 centrifuges divided into two cascades (interlinked networks) to expand beyond 3,000, diplomats with access to intelligence told Reuters.

Centrifuges are technically temperamental tubes that spin at supersonic speed to refine uranium to levels suitable for power plants or bombs, depending on their configuration.

The IAEA is pressing Iran to explain Western intelligence that it conducted secret studies into how to "weaponise" nuclear materials despite its membership of the Non-Proliferation Treaty. Iran says the information is forged.

Asked about Japanese companies that have been reluctant to do new business in Iran Ahmadinejad told Kyodo: "Ask those companies why they are depriving themselves. The nuclear issue is a totally political issue."