Iran says it is considering nuclear package

Iranian President Mahmoud Ahmadinejad said a package of incentives and penalties aimed at inducing it to abandon its nuclear programmes was a positive step, but gave no hint as to when he might formally respond.

He had asked colleagues to consider the offer from the permanent members of the UN Security Council, along with Germany, and would give a response "In due time", Ahmadinejad told a news conference in Shanghai.

"My colleagues are carefully considering the package of proposals offered by the six countries to the Islamic Republic of Iran and in due time they will give the response," he said through a translator.

The West believes Iran's uranium enrichment could be used to make nuclear weapons, but Tehran insists it is purely for energy-generation and civilian use. "Basically, we are not seeking to develop nuclear weapons," said Ahmadinejad, who appeared relaxed and bantered with reporters.

When asked about Israel's nuclear weapons capability, he said: "The Islamic Republic of Iran has developed the capability to defend itself." But Ahmadinejad, who previously has called for Israel's destruction, also said there were "no differences" between Jews, Christians and Muslims when asked about the Holocaust.

"All of them have their dignity and right to be respected." Ahmadinejad was in Shanghai as an observer to the Shanghai Cooperation Organisation, a Central Asian summit, but he has stolen the spotlight as the world awaits Iran's response to the package of incentives.

Sanctions loom

If Iran rejects the package and sticks to its refusal to suspend uranium enrichment, Western powers could push for sanctions at the Security Council, action China and Russia have traditionally opposed.

"Sanctions should not be used as a leverage or pressure against the countries of the world," Ahmadinejad said. Russian President Vladimir Putin discussed the nuclear dispute with Ahmadinejad on Thursday, the foreign ministers of China and Iran also exchanged views on it, and Ahmadinejad met with Chinese President Hu Jintao earlier on Friday.

Ahmadinejad said Iran, China and Russia were in broad agreement on the issues. "Our views and positions on many issues are close or even identical." Iran is China's third-biggest supplier of crude oil imports and earlier offered member states of the Shanghai Cooperation Organisation energy cooperation, but on Friday he made no mention of energy issues.

China, which is also host to stalled six-party talks aimed at dismantling North Korea's nuclear programmes, has continually urged dialogue, rather than threats or sanctions,

to resolve the dispute on Iran. "From the meetings we can feel that the Iranians are

looking into this package solution proposed by the six countries seriously, and I think the Iranians might need some extra time," Chinese Foreign Ministry spokesman Liu Jianchao said late on Thursday.

Some Western officials are starting to worry that Iran may drag out its decision past an unofficial July deadline in order to continue work on fuel enrichment.