"If they want to put this prerequisite, why are we negotiating at all? Mr Bush is like a mathematician. When the equation becomes very difficult to work out, he likes to wipe it out altogether ... the pressure they are putting on us is reason enough for us to be suspicious." Mr Larijani's remarks represented his most negative assessment since the west's package was presented on June 6, suggesting a quick resolution was unlikely. Diplomats say Iran has been given a de facto deadline of the G8 summit in St Petersburg in mid-July for a formal response.

But Mr Larijani said Iran would present extensive and detailed counter-proposals only when it was ready to do so, although committees of experts were "working round the clock". A debate is underway inside the government with hardline ayatollahs calling for outright rejection of the west's ideas and some officials stressing their positive aspects.

Mr Larijani, former deputy head of Iran's Revolutionary Guards, is the most influential political figure in the country after President Mahmoud Ahmadinejad and answers directly to the Supreme Leader, Ali Khamenei. As chairman of the Supreme National Security Council, he oversees security and defence strategy.

Mr Larijani said American policies in the Middle East, from Iraq to Palestine, were deeply destabilising and had complicated efforts to cut a deal. "If they continue on the same path, the price of oil will skyrocket and it will strengthen our resolve. They want to set fire to the region. The American strategy is to use force to secure their interests."

He also blamed Israel for many of the region's problems. "I think those people advising the CIA are the Zionists. They are pushing [the Americans] into this quagmire of war."

He denied reports that Iran was planning to block oil export routes through the Strait of Hormuz, at the mouth of the Gulf, if it was attacked or if UN sanctions were imposed. But he warned that if hostile action was taken through the UN security council, Iran would "reconsider its relationship" with the International Atomic Energy Agency. That could spell an end to already limited UN inspections of the nuclear plants at Natanz and Isfahan.

Mr Larijani said he was in constant contact by telephone with the EU's foreign policy chief, Javier Solana, contrasting Iran's dialogue with the Europeans with a lack of contact with the Bush administration. But he offered to talk to the White House if US policies changed."We should put aside the [US] sanctions and give up all this talk about regime change.

"This is what we are looking for ... if the Americans change their behaviour in the region and change their strategy, I assure you that talking over the phone will not be a serious problem."

He was critical of US attempts to promote democracy inside Iran. "They said they wanted to turn Iraq into a beacon of democracy. And out of that whole venture came Abu Ghraib and atrocities that were committed there on a daily basis ... the Palestinians chose a Hamas government. Why are they so hostile towards them?"

The $70m earmarked by the Bush administration to aid propaganda efforts inside Iran was an insult, he said. "I think that money is very little, to be honest," he said with a wry smile. "The minimum acceptable amount should be $70bn so the citizens of this country would at least get something out of it."

Mr Larijani declined to discuss the specifics of Iran's coming counter-proposals. "But suffice it to say [the west's package] has a lot of ambiguous points. These ambiguities persist from the beginning to the end of the package.

"On many of the points, we do not know how they intend to go about them. The package is more like a statement. If we are going to get agreement, we do not need a sermon."

Mr Larijani said there was no doubt that security guarantees were badly needed as part of any deal - "but not what they have talked about. They should not try to repackage their needs as incentives and offer that to us as a concession".

But he reiterated Iran's insistence that, despite western suspicions to the contrary, it has no wish to acquire a nuclear weapons capability. "We are not trying to construct the bomb. We don't want the bomb. The Americans know this. And Mr [John] Negroponte [the US intelligence tsar] announced some time ago that that Iranians don't have the bomb and wouldn't be able to make the bomb, even if they wanted to, for more than 10 years."

He strongly objected to the west's perceived double standards in objecting to limited nuclear-related "research and development" by Iran while acquiescing in Israel's and India's nuclear weapons programmes.

GENEVA - Iran backed efforts by Islamic states on Thursday to get the United Nations new Human Rights Council to counter what they call "defamation of religion" around the world.

But Canada accused the Iranians of discrediting the Council by including in their delegation the state Prosecutor-General who Ottawa says was linked to the arrest and death in Tehran of a Canadian woman journalist.

Iranian Foreign Minister Manouchehr Mottaki told the 45-member Council, holding its first-ever session, that freedom of expression "should not constitute a pretext and a platform to insult religions and their sanctities.

"Defamation of religions, particularly the divine message of Islam, should be rejected," he declared. Action on this should be part of the rights standards set by the Council and pursued through "implementation at the international level."

His remarks echoed a call from the Organization of Islamic States (OIC) and assertions by Saudi Arabia that Islam faced "an escalation of hatred and animosity ... disdain for its values and everything it holds sacred."

Although some diplomats say the drive reflects Muslim anger over cartoons published in the West last year depicting the Prophet Mohammad, others see it as part of a longer-term effort to counter criticism of the rights records of many OIC states.

Members of the grouping, including Saudi Arabia and Iran, were often accused at the Council's predecessor, the Human Rights Commission, of violating the rights of women and national and religious minorities.

In his speech, Iran's Mottaki accused Western countries of trying to impose "uniculturalism" on the U.N. system to ensure their own values set the model for all human rights standards.

But Mottaki made no reference to the complaint to the Council from Canada's Foreign Minister Peter MacKay, who also called on other delegations to protest over the presence in the Council of the Iranian prosecutor, Saeed Mortazavi.

By including Mortazavi in its delegation, MacKay said in a statement through his office, "Iran is trying to discredit the Council and deflect attention from its goal of ensuring greater respect for human rights."

Independent human rights groupings at the session say Mortazavi has played a key role in the detention of hundreds of domestic critics of Iran's Islamic authorities, as well as of journalists accused of defaming the state.

In his speech, the President of the newly created Saudi Human Rights Commission said his country "in keeping with Islamic tradition ... accords special attention to the issue of religious tolerance" and respect for different cultures.

Although there were ongoing efforts in the West to link it with terrorism, he declared, "Islam is a moderate religion that advocates mutual tolerance, empathy and coexistence and rejects fanaticism, obscurantism and coercion."

In every statement on Iran, officials of the George W. Bush administration routinely repeat the party line that "the president never takes any option off the table".

Despite the constant invocation of a possible military attack on Iran, however, a little-noticed section of the administration's official national security strategy indicates that Bush has already decided that he will not use military force to try to prevent Iran from going nuclear.

Instead, the administration has shifted its aim to pressing Iran to make internal political changes, based on the dubious theory that it would lead to a change in Iranian nuclear policy.

News coverage of the U.S. National Security Strategy (NSS) issued Mar. 16 emphasised its reference to the doctrine of preemption. But a careful reading of the document reveals that its real message -- ignored by the media -- was that Iran will not alter its nuclear policy until after regime change has taken place.

The NSS takes pains to reduce the significance of Iran's obtaining a nuclear capability. "As important as are these nuclear issues," it says, "the United States has broader concerns regarding Iran. The Iranian regime sponsors terrorism; threatens Israel; seeks to thwart Middle East peace; disrupts democracy in Iraq; and denies the aspirations of its people for freedom."

Then the NSS states, "The nuclear issue and our other concerns can ultimately be resolved only if the Iranian regime makes the strategic decision to change these policies, open up its political system, and afford freedom to its people. This is the ultimate goal of U.S. policy.

This carefully worded statement thus explicitly makes regime change -- not stopping Iran's progress toward a nuclear capability -- the goal of U.S. policy toward Iran.

National Security Adviser Stephen J. Hadley, speaking at the U.S. Institute of Peace the same day the NSS was released, invoked the document's formulation on Iran policy and suggested that implementation would be guided by whether any particular action would contribute to broader political changes in Iran.

According to a transcript obtained by IPS, Hadley referred to a "strategy of trying to keep the international community together and get Iran to change its policy on the nuclear issue, on support for terror and on its treatment of its own people". He added that the administration would make "tactical decisions in the context of whether it will advance our overall strategy".

Hadley suggested that the NSS formulation amounted to a policy of regime change. "In terms of regime change," he said, "what I have said and what is said in this document is we need regimes to change their policies."

The implications of the NSS and Hadley's remarks for the military option are clear: if the goal of the policy is to achieve internal political change in Iran, which is assumed to lead to a change in nuclear policy, then there is no need for the administration to contemplate an attack on Iran. And if a military attack on Iran might impede progress on political change, the logic of the formulation is that the military option should be avoided.

A report by David Sanger in the New York Times Mar. 19 quoting an administration official in an interview a few weeks earlier further underlines the administration's decision against using force to prevent Iran from going nuclear.

"The reality is that most of us think the Iranians are probably going to get a weapon, or the technology to make one, sooner or later," the official was quoted as saying. The hope, according to the official, was that by the time it happened, "We'll have a different relationship with a different Iranian government."

The official said the "optimists" hoped to delay the Iran's nuclear capability by "10 or 20 years". That statement clearly inflated the time administration officials believe it would take Iran to be able to make a nuclear weapon. Intelligence estimates have consistent estimated Iran capable of building a bomb within five to 10 years.

But the Bush administration will only be in office for another two and a half years, so it knows that Iran will not go nuclear on its watch.

Secretary of State Condoleezza Rice's long and unsuccessful diplomatic campaign to get the five powers (Britain, France, Germany, Russians and China) to agree on a U.N. Security Council resolution under Chapter VII of the charter would have opened up the theoretical possibility of a Security Council-sanctioned U.S. air attack on Iran, thus serving to make that threat somewhat more credible.

But the administration has done nothing to indicate that it actually plans to use a Security Council resolution as the basis for a preemptive attack. On Apr. 30, after a meeting of NATO and EU foreign ministers on Iran in Sofia, Bulgaria, EU foreign policy chief Javier Solana said "nobody" had "considered the possibility of a military solution in Iran" or of a "coalition of the willing" such as formed to go to war against Iraq, to use military force against Iran.

The only multilateral sanctions against Iran that have been mentioned by administration officials thus far involve "isolating" Iran by cutting off diplomatic contacts and trade. But such a diplomatic and economic isolation strategy depends entirely on other major powers. The United States can't do anything more to isolate Iran, because it has had no diplomatic relations with Tehran for 27 years and has had comprehensive economic sanctions against the Islamic Republic since 1995.

Even if all the powers agree, it would take months for such diplomatic and economic sanctions to go into effect and many more to see what difference they make, if any, on Iran's policy. Meanwhile, however, Iranian scientists will be continuing to master the technology of uranium enrichment.

No one knows when Tehran would be able to claim that it already has the technological know-how to be a nuclear power, even if it does not go to the stage of weaponisation, but it well may be less than two years from now.

Despite the evidence of Iranian success in entering the first stage of uranium enrichment in April this year, however, Secretary of State Condoleezza Rice has continued to express confidence that the threat of diplomatic and economic isolation of Iran from other major powers will be devastatingly effective.

Appearing on the Fox News show "The O'Reilly Factor" May 31, for example, Rice declared, "I don't believe that the Iranians can tolerate the level of isolation that they will endure if they don't make the right choice."

Rice's confidence in the isolation strategy makes little sense, except as a cover for the administration's quiet abandonment of the military option and its real focus on regime change. That objective is also being pursued through overt funding of Iranian opposition groups (including 75 million dollars to "promote democracy") as well as covert support for armed resistance elements operating in Iran's border areas.

But the advocates of war against Iran are already up in arms over the administration's Iran policy. In the May 8 edition of the neoconservative Weekly Standard, William Kristol ridiculed claims apparently made by Rice and her colleagues privately that they have been merely "reassuring Europeans so as to keep them on board".

"Much of the U.S. government," Kristol concluded, "no longer believes in, and is no longer acting to enforce, the Bush doctrine."

Gareth Porter is an historian and national security policy analyst. His latest book is "Perils of Dominance: Imbalance of Power and the Road to War in Vietnam."

The unprecedented initiative was approved by Iran's supreme leader, Ayatollah Ali Khamenei and then-President Mohammad Khatami - the moderate whose attempts at dialogue were mocked and undercut at every turn by the Bush Regime, helping to discredit the entire reformist movement in Iran and leading to Khatami's replacement by the militant hardliner Mahmoud Ahmadinejad.

In other words, everything that George W. Bush says he wants from the Iranians now, he could have had for the asking - three years ago. What then can we conclude from the rejection of this extraordinary initiative? The answer is obvious: that the Bush Faction is not really interested in curbing nuclear proliferation or defusing the powder keg of the Palestinian-Israeli conflict, and the regional and global terror that it spawns.

What are they interested in? This answer too is obvious, to anyone who's been paying the slightest attention to the Faction's words and actions over the years: they are interested in loot and dominion. What they want from Iran is nothing less than its return to quasi-colonial control by the crony conquistadors of the West. And they're willing to play a (reasonably) long game to get it.

In the meantime, it serves their interests well for the entire Middle East to seethe and boil. War and rumors of war are engines of limitless profits for the crony-cons. It sends oil prices sky-high and keeps those pork-laden contracts for weapons and "military servicing" rolling in. And the terrorism that thrives in this deliberately created chaos is another massive money-maker, as vast armies of "security consultants" ply their political connections to gobble up tons of insider grease. Bush Regime minions have led the way in this alchemical transmutation of fear into gold: more than 90 officials from the Department of Homeland Security have stampeded through the revolving door from government service to lucrative private posts with companies seeking - and getting - fat deals from, er, the Department of Homeland Security, the New York Times reports.

Billions of dollars are being generated for the fortunate few by war and terror; why kill the golden goose of chaos by pursuing Middle East peace? Far better to keep the madness churning until you see a chance to grab complete control, as in Iraq; then you can start squeezing your conquest dry. And if it doesn't work out, if it all blows up, who cares? You're just back to the same old profitable chaos, biding your time, banking your wad - and squeezing your own country dry - until the next go-round. It's the ultimate win-win scenario.

The only losers are the rest of us - but above all, the populations of the Middle East. For it's an indisputable fact, confirmed every day, by every policy decision made in Washington, that the Bush Faction doesn't give a damn about the ordinary people in that tormented region - not even the Israelis. It doesn't care about their freedom, their security, their children; it doesn't care if they live or die; it only cares about their exploitable resources and their geopolitical usefulness to the Faction's openly stated desire for "full spectrum dominance" over the political and economic life of the globe. There is no other conclusion to be drawn from the Bushists' actual record - what they actually do, what they actually support, and what they actually ignore - once you strip away their cynical, ever-shifting rhetoric.

If Bush really wanted peace in the Middle East, he would have pursued Iran's unprecedented offer of "full cooperation" in resolving the Palestinian-Israeli conflict. If Bush really wanted to eliminate the danger of an Iranian nuclear weapons program, he would have seized on Tehran's offer of "full cooperation" to do so. It's as simple as that. But he chose not to take up the offers. These goals are not priorities for him. His interests lie elsewhere.

By the way, Saddam made a very similar offer just before the invasion, as the New York Times reported in 2003: acquiescence to U.S. initiatives on Israel-Palestine; full cooperation on WMD inspections; even internationally supervised elections, which would have almost certainly ousted him from power, were on the table. Everything that Bush claimed he went to war for in Iraq - disarmament, regime change, reducing Middle East tensions, democracy for the Iraqi people - he could have had, for the asking, without war.

But the Bushist crony-cons wanted war in Iraq, come hell or high water - or even Saddam's surrender. Again, this is not supposition, it's a fact. As we've often reported here, in September 2000 a "think tank" led by Dick Cheney and Don Rumsfeld published a report, "Rebuilding America's Defenses," stating that the imposition of an American military presence in Iraq was a strategic imperative "transcending the regime of Saddam Hussein." In this same report, the Cheney-Rumsfeld group also acknowledged that it would take a "new Pearl Harbor" to "catalyze" the American people into readily accepting their radical plans for military expansion abroad and vast new "defense" spending at home. Not only can these wizards turn fear into gold; they can apparently see into the future as well.

Now that same crystal ball shows them the wealth of Persia falling like ripe fruit into their hands. They may feign diplomacy for the moment, biding their time, profiting from chaos -- but as in Iraq, no offer of peace will deter them from the inevitable smash-and-grab.

Faced by growing pressure from the US, Britain and other European countries over its nuclear activities, Tehran is anxious to win international support for its position. High-level meetings have been held in recent weeks with Russia, China and numerous Arab and Muslim states.

"We have intensified our diplomatic activity to explain the situation to other countries," Hamid-Reza Asefi, the Iranian foreign ministry spokesman, told the Guardian.

But Iranian cooperation and investment in Venezuela, which is led by George Bush's tormentor-in-chief, President Hugo Chávez, and new business ventures with Sudan, where the US has said genocide is taking place, may be viewed as a bridge too far in Washington. It regards all three countries as "rogue" states.

"Our relationship with Venezuela has improved a lot," Mr Asefi said. "We have good cooperation in construction, oil and gas, and in infrastructure projects. Our people are busy there making houses, roads, dams and in transport."

There were about 100 Iranians working in Venezuela, Mr Asefi said, providing "know-how and knowledge". Both countries are significant oil producers and members of Opec. Iranian officials have estimated that actual and planned investment in Venezuela could ultimately total $9bn (£5bn).

Mohsen Shaterzadeh, deputy industries and mines minister, said this week that the two countries had finalised an agreement to build a giant car plant in Venezuela. Iran will have a 51% stake in the project.

Tractors are another of Iran's strengths. Mohsen Khadem Arab-Baghi, who heads the Iran Tractor Manufacturing Company, said the company is expected to make up to 30,000 tractors by March 2007. Though its products are exported to 30 countries, "our greatest target market is Venezuela, which accounts for $85m of our tractor exports," he said.

The US slapped trade sanctions on Venezuela two months ago, including a ban on the sale of spare parts for F-111 fighter jets. In retaliation Mr Chávez threatened to sell the planes to other countries, including Iran. Mr Asefi said Iran has "no plans" to buy the aircraft.

In an apparent provocation aimed at Washington, Mr Chávez has also proposed collaboration on nuclear energy research with Iran. Mr Asefi said the two countries were cooperating on scientific research in medicine and agriculture but not in the nuclear field. The US believes Iran is trying to develop nuclear weapons, a charge it denies.

Iran's relations with Sudan took a significant step forward on Wednesday when President Mahmoud Ahmadinejad met the Sudanese government's special envoy, General Salah Abdullah Mohammad, and minister for international cooperation, Saleh Hudeib Al-Tijani, in Tehran.

Mr Ahmadinejad said: "Tehran and Khartoum should enhance their current trade volume." He added that Iranians had "always supported Muslim and oppressed peoples in the world". It was not known whether the discussions covered the crisis in Darfur, where tens of thousands have died, or the Sudanese government's recent refusal to allow UN peacekeepers into the area.

Already close relations between Iran and Syria have also been upgraded following a visit to Damascus by Manouchehr Mottaki, Iran's foreign minister. Defence ministers from the two countries agreed last week to increase military cooperation.

"Iran and Syria can be good role models for all Muslim countries," said Mostafa Mohammad-Najjar, Iran's defence minister. "Both countries believe there is no need for foreign troops in the region." He said Iran would continue its research into missile technology and new missile systems.