President Mahmoud Ahmadinejad vowed once again on Tuesday to "cut the hands" of Iran's enemies if the Islamic republic comes under attack.

"We will welcome a hand which has sincerely reached out for friendship, but if anywhere in the world a hand is extended for aggression against Iranians, the nation will cut it from the arm," he told a rally in South Khorasan province.

Iran's arch-foes Israel and the United States have not ruled out military strikes against Tehran's nuclear sites to stop its atomic programme which the West suspects is aimed at making an atom bomb.

In his speech broadcast live on state television from the northeastern province, Ahmadinejad repeated Tehran was not making an atomic bomb, stressing Iranians do not need them.

Tension between Iran and Western powers has peaked after Tehran began work on enriching uranium to 20 percent purity level, in theory bringing it closer to the level required for making a nuclear weapon.

Uranium when enriched at low level can power a nuclear reactor, but when refined to 93 percent can be used to make the fissile core of an atom bomb.

earlier related report
Iran ready to buy reactor fuel or swap on own terrority: letter
Vienna (AFP) Feb 23, 2010 - Iran is ready to buy fuel for a nuclear reactor or swap its own stockpile of low-enriched uranium for the fuel, but on its own territory, it said in a letter to the UN atomic watchdog obtained by AFP on Tuesday.

"I would like to inform the agency, on behalf of my government, that the Islamic Republic of Iran is still seeking to purchase the required fuel in cash," Tehran's enovy to the International Atomic Energy Agency, Ali Asghar Soltanieh, wrote in a letter dated February 18 to IAEA chief Yukiya Amano.

It is the first time that the IAEA has received a written response from Iran to an international plan hammered out under the agency's auspices last October to supply fuel for a nuclear research reactor in Tehran that makes radioisotopes for medical purposes such as the treatment of cancer.

The reactor's fuel is running low and Iran had asked the IAEA to find ways of securing fresh fuel.

Under the IAEA's previous director general, Mohamed ElBaradei, the watchdog drew up a plan whereby Iran would hand over its stockpile of low-enriched uranium (LEU) to Russia for enrichment to the required level of 20 percent.

The material would then be processed by France into the necessary fuel rods for the reactor.

The plan's main advantage, from the point of view of the international community, was that Iran's stockpile of uranium -- built up in defiance of UN sanctions -- would be taken out of Tehran's hands. And that meant it could not be covertly made into an atomic bomb, as many countries feared.

Nevertheless, the Islamic republic has consistently balked at the idea, seeing it a ruse, primarily by the United States, to deprive it of its LEU. And it has demanded that the material be swapped simultaneously on its territory instead.

But such an arrangement has been firmly rejected in turn by France, Russia and the United States, as well as by the IAEA.

So far, Iranian officials have offered only verbal responses, sometimes seemingly contradictory, but steered away from a formal written response.

In Soltanieh's letter, which the IAEA has since passed on to the countries involved, Iran reiterated its previous demands.

"If the agency is not able to fulfill its duty ... then Iran is ready to exchange the required fuel assemblies with the LEU (low-enriched uranium) material produced at Natanz, simultaneously in one package or several packages in the territory of the Islamic Republic of Iran," it stated.

Earlier this month, Iran started enriching its stockpile of LEU to the 20-percent level required to fuel the research reactor.

In its latest report on Iran, circulated to member states last week, the IAEA confirmed the process had started.

The bluntly worded report, the first under Amano who took over as IAEA director general on December 1, also expressed concern that Iran might be seeking to develop a nuclear warhead.

"The information available to the agency... raises concerns about the possible existence in Iran of past or current undisclosed activities related to the development of a nuclear payload for a missile," stated the report, which is to be discussed at the traditional spring meeting of the IAEA's 35-member board of governors next week.

Iran has dismissed the report as biased.