Washington is "hallucinating" if it thinks Iran will scrap its nuclear fuel production plans in return for economic incentives, a senior Iranian official was quoted as saying on Sunday. The United States offered the encouragement's in support of the European Union which is negotiating with Tehran to try to persuade it to give up sensitive nuclear activities. "US officials are either unaware of the substance of the talks or (they are) hallucinating," Sirus Naseri, a senior member of Iran's nuclear negotiating team, told the official IRNA news agency.
Iran says it needs atomic technology to generate electricity and will never use it to make bombs, as the United States fears.
London's Sunday Times said Israel had drawn up plans for a combined air and ground attack on Iranian nuclear installations if diplomacy fails to halt Tehran's atomic programme.
The newspaper said Israeli Prime Minister Ariel Sharon and his inner cabinet had given "initial authorisation" for a unilateral attack at a private meeting last month.
Israel, which bombed Iraq's Osirak nuclear reactor in 1981, played down the report. Iran has said it will respond vigorously to any attack on its nuclear plants.
Washington gave practical backing for the EU's diplomatic approach on Friday, offering to allow Iran to begin talks on joining the World Trade Organisation (WTO) and consider letting it buy civilian airline parts if it ceased all activities that could produce fuel for nuclear power plants or atomic weapons.
Iran dismissed the US offer as insignificant. Intelligence Minister Ali Yunesi told IRNA it was "funny and disrespectful".
"The US should apologise to Iran for making this proposal," he said, going on to describe US Secretary of State Condoleezza Rice as a "queen of war and violence".
Naseri said it was not clear if greater US involvement in the negotiations was "helpful or an obstacle to progress".
He said the EU, which has persuaded Iran to suspend potentially weapons-related activities like uranium enrichment while the two sides try to reach a solution, was close to accepting that Iran would not give up enrichment.
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