Tehran defiant on nuclear programme Iran has said it will continue to stockpile highly enriched uranium and has ruled out the inspection of a suspect military site in a sign of Tehran's frustration that concessions on its nuclear programme may not result in relief from international sanctions. Fereydoon Abbasi-Davani, the head of Iran's Atomic Energy Organisation, said over the weekend that there was "no reason" to end enrichment of uranium at 20 per cent concentration, which is easy to transform to the 90 per cent level needed for a bomb. He had previously indicated that Iran, which insists its nuclear programme is for peaceful purposes, could halt production of 20 per cent uranium after enough material was produced for domestic civilian consumption. Similar comments by other Iranian officials had fuelled suspicions that Iran was ready for a deal to end enrichment of highly enriched uranium in exchange for incentives such as the easing of US and EU energy and banking sanctions, which will take effect on July 1. Iran's disappointment comes after its two-day meeting with the European Union and six main powers - the US, UK, France, Russia, China and Germany - in Baghdad revealed fundamental disagreements between the two sides and ended without progress. Mr Abbasi also said that the International Atomic Energy Agency, the UN nuclear watchdog, had not yet convinced Tehran why it needed to inspect the Parchin military complex - south-east of Tehran, which the IAEA suspects may have been a site of research related to nuclear weapons development. "We have no nuclear site in Parchin," Mr Abbasi stressed. Iran was believed to have been considering offering access to inspectors prior to the Baghdad talks. Mr Abassi's comments will deepen the frustration of some western diplomats who believe that it will be difficult to make progress with Iran over its nuclear programme after last week's two-day meeting in Baghdad. One senior diplomat told the FT he simply did not know whether any progress could be made at the next session of talks in Moscow on June 18 - or whether the process would completely collapse. One factor that allows Iran to maintain its tough stance is that it knows the Obama administration does not want negotiations to collapse before November's US presidential election. The collapse of the talks would bolster Israeli leaders who believe an attack should take place this summer or autumn. Iranian analysts believe Iran's supreme leader, Ayatollah Ali Khamenei, who has the last say in all state affairs, has given Iran's negotiating team greater authority than ever to break the current impasse through a step-by-step approach, while insisting on the country's right to continue enriching uranium, although at a lower grade. However, Tehran realised in Baghdad that it was being offered spare parts for civilian aircraft in return for conceding an important early bargaining chip: freezing production of more highly enriched uranium. Western diplomats also refused to discuss Iran's right to enrich lower grade uranium. "Giving spare parts for civilian aircraft is considered too little and too insulting for Iran, while it expected easing of oil sanctions," said a senior Asian diplomat in Tehran. Iranian media and analysts blame pressure from Israel, the US congress and Arab states for the western powers" refusal to discuss Iran's right to enrich uranium at a lower grade. The Iranian rial, has weakened by 5 per cent since last Wednesday, reflecting the disappointment of Iran's business community on the lack of progress in Baghdad. Meanwhile, reform-minded politicians fear that if the nuclear talks fail it would empower those inside the regime who insist the US is only interested in regime change in Tehran. One political analyst said that the failed talks would push Iran towards more aggressive policies in the Middle East because "the mentality is language of force needs to be responded by a language of force." Kayhan daily newspaper, which is the mouthpiece for Iran's hardliners, said nuclear negotiations with the six powers was like "playing in the enemy's court" and that it was "better not to attend the next meeting in Moscow or anywhere else."