The head of the UN nuclear watchdog said today that he could not yet confirm if Iran had enriched uranium to 3.5 per cent, the level used to fuel nuclear power stations.

"I cannot confirm that. Our inspectors have taken samples. They will report to the (IAEA) board," said Mohamed ElBaradei, head of the International Atomic Energy Agency (IAEA.

Mr ElBaradei arrived in Tehran this morning in another attempt to resolve the stand-off over Iran's nuclear project. On Tuesday, Iran dismayed world opinion by announcing that it had succeeded for the first time in enriching uranium, technology that it claims it wishes to use for civilian nuclear energy programme but which many fear is a prelude to Iran developing an atomic bomb.

As he arrived in Iran this morning Mr ElBaradei said that he remained hopeful Iran could still be persuaded to suspend its research through diplomacy. His optimism met its first setback soon after, as Mahmoud Ahmadinejad, the Iranian President, pledged that Iran would not "retreat".

"The enemies think they can stop Iran’s development with a psychological war, propaganda and political pressure. But they do not know the Iranian nation is standing solid like a mountain and there is no room for defeat and retreat," state television quoted Mr Ahmadinejad as saying.

"We know they [the US and its allies] are waiting for us to retreat an inch so that they use that against us."

Iran claims to have perfected pilot-scale enrichment using 164 centrifuges. It intends to install 3,000 centrifuges at its Natanz research centre by the end of the year. A senior Iranian official has confirmed that the Islamic republic plans to manufacture a cascade of 54,000 centrifuges, capable of producing enough enriched uranium to provide fuel for a 1,000-megawatt nuclear power plant.

The rhetoric between Iran and the West has escalated as the April 28 deadline for possible sanctions set by the United Nations Security Council approaches.

In what many are viewing as a carefully timed piece of political theatre, Mr Ahmadinejad's announcement on Tuesday of Iran's scientific breakthrough came soon after media suggestions that the US was preparing for a military strike against Iran.

In front of a nationally televised celebration in the holy city of Mashhad, he announced that Iran had joined the "nuclear club", but denied again that the country's ultimate ambition was to build weapons.

"Our answer to those who are angry about Iran obtaining the full nuclear cycle is one phrase, we say: 'Be angry and die of this anger'," he added last night. "We will not hold talks with anyone about the Iranian nation’s right [to enrichment] and no one has the right to step back, even one iota."

Mr ElBaradei today met Iran’s vice president and Gholam Reza Aghazadeh, Iran's Atomic Energy Organisation chief. He also held talks with Ali Larijani, Iran’s top national security official and nuclear negotiator.

Britain and Washington have both said that Iran is "moving in the wrong direction". The White House has dismissed reports in the New Yorker and Washington Post that it is in the preliminary stages of planning a military strike against Iran's nuclear facilities.

Condoleezza Rice, the US Secretary of State, telephoned Mr ElBaradei last night to ask him to reinforce demands that Iran comply with its non- proliferation requirements.

"This is not a question of Iran’s right to civil nuclear power," she said. "This is a question of ... the world does not believe that Iran should have the capability and the technology that could lead to a nuclear weapon."

Russia and China, which both have close trading and energy links with Iran, have condemned Iran but continue to urge caution. Cui Tiankai, China's Assistant Foreign Minister, will visit Iran and Russia from April 14 to 18, in another attempt to defuse tensions.

The nuclear programme has become a point of national pride in Iran and Tuesday’s announcement was clearly aimed to fuel that feeling among Iranians. Yesterday state television aired footage of school principals ringing bells in the name of "national dignity and glory" to mark the success, and Iranians were shown distributing sweets and pastries in the streets and offices to celebrate.

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