"Iran will continue its uranium enrichment. We want to produce our own nuclear fuel," Iran's chief nuclear negotiator Ali Larijani was quoted as saying by the students news agency ISNA. "We will never stop it."

The U.N. Security Council has told Iran to suspend atomic fuel work by August 31 or face possible sanctions. The West suspects Iran is secretly pursuing nuclear arms. Iran insists its nuclear work aims only to generate electricity.

"Any measure to deprive Iran of its right will not change our mind about our aim," Larijani said.

Deputy Foreign Minister Mohammad Reza Baqheri also told the official IRNA news agency that Iran would not give up enrichment. "It is our red line," he said.

"Those who threaten us with sanctions know perfectly that we have obtained a home-made atomic program under international sanctions," Larijani said. "And it is irreversible."

On Sunday Iran has test-fired a sub-to-surface missile in the Persian Gulf during large-scale military exercises.

State-run television reports the test of the long-range missile was successful.

A brief video clip showed the missile, fired from a submarine, hitting a target on the surface of the water within a kilometer.

The test came as part of military exercises under way throughout the country. Iran has routinely held war games over the past two decades to improve its combat readiness and to test equipment including missiles, tanks and armored personnel carriers.

/Reuters, Associated Press/