By Vivian Ho

PUTRAJAYA, Malaysia, Aug. 3 Kyodo, Iran still believes the impasse over its nuclear program can be resolved through dialogue, Iranian President Mahmoud Ahmadinejad reiterated here Thursday.

''We have said we desire dialogue and negotiation. In the shadow of negotiations, it is possible to settle any dispute,'' Ahmadinejad told a press conference on the sidelines of a meeting of the Organization of the Islamic Conference in Malaysia's federal administrative capital Putrajaya.

''Even now some sort of dialogue is going on, but the crimes committed by the Zionist regime has overshadowed all activities,'' he added in an allusion to Israel's incursion into Lebanon to punish the Hezbollah militia backed by Iran and Syria.

Iran's foot-dragging over calls for it to stop its uranium-enrichment program has led to the country's referral to the U.N. Security Council, which voted earlier this week to give it until Aug. 31 to accept a package of incentives to end the program or face the threat of economic sanctions.

Ahmadinejad said Iran is still mulling the package offered June 6 by Germany and the Security Council's five permanent members -- Britain, China, France, Russia and the United States. Tehran had earlier announced that it will give a response on Aug. 22.

''We have said that we will consider the European package and still we are in the process of consideration,'' he said.

The incentives are believed to include sale to Iran of a light-water nuclear reactor, guarantees of nuclear fuel, EU help for Iran to modernize its oil and gas sector, and the possibility of eventually allowing Iran to resume uranium enrichment if it complies with all outstanding International Atomic Energy Agency requirements.

They are also thought to include negotiations on an EU-Iran trade agreement, Iran's membership in the World Trade Organization, and easing of U.S. sanctions to permit sales to Iran of commercial aircraft or aircraft parts.

Ahmadinejad reiterated that Iran's nuclear program is peaceful in nature and meant to generate power. The United States and its European allies suspect that Iran aims develop nuclear weapons.

Regarding U.S. accusations that Iran is backing Hezbollah with funds and by supplying arms, Ahmadinejad merely stated, ''We have declared that we always extend our support to freedom lovers and the oppressed.''

2006-08-03 23:36:38JST