Washington appears to have abandoned any attempt at negotiation, accusing Iran of developing nuclear weapons despite International Atomic Energy Agency (IAEA) evidence to the contrary. The IAEA reported on 24 August that traces of weapons-grade uranium found in Tehran's nuclear facilities in 2003 came from contaminated Pakistani equipment sold second-hand to Iran.

At the time, Washington accused Tehran of covertly developing nuclear arms. US State Department spokesman Sean McCormack has dismissed the IAEA's findings. The contamination was 'one part of this overall set of questions that not just the US has, but the rest of the world has about Iran's nuclear programme,' McCormack said. Washington has 'unresolved concerns outside the issue of the contaminated centrifuges', including Tehran's involvement with 'clandestine nuclear procurement networks', he said.

Supreme Leader Ayatollah Ali Khamenei on 19 August reiterated that the Islamic republic would never halt its nuclear programme, but had no interest in atomic arms. Addressing worshippers at Friday Prayers at Tehran University, Khamenei accused western officials of misleading public opinion by suggesting that Iran was secretly building nuclear weapons. 'They talk as if Iran seeks nuclear weapons and that they oppose it,' he said in a sermon broadcast live on state radio. 'That is a lie and they know it.'

Khamenei said Iran wanted to enrich uranium to a grade useable in atomic reactors but not to the higher grade needed to make atom bombs. 'We want to produce the fuel for our power plants by ourselves, and they say don't. They say buy the fuel from us. What does that mean? It means we should stay dependent. They want the Iranian nation to stay dependent on the powers that produce nuclear power,' he said.

'The Europeans should not talk in a demanding tone. Today is not like the 19th century... we are not afraid of anybody. We have the power to defend our rights and we will not give up our rights,' he said.

Popular feelings are also running high. Hundreds of Basij militia members protested outside European embassies in Tehran on 23 August, vowing to defend Iran's nuclear programme. 'Our nuclear activities are more important than the [1980-88] Iran-Iraq war,' said Ibrahim Motevalian, the head of the Basij at Tehran University. 'We will resist to the last drop of our blood.'