Iran says will not halt nuclear work despite U.S.

TEHRAN (Reuters) - Iran will never halt its nuclear work and expects the United States to change its "failed" carrot-and-stick approach to solving the atomic row with Tehran, the Foreign Ministry said on Monday.

U.S. President-elect Barack Obama said on Sunday he was prepared to offer Iran economic incentives to stop its nuclear program, which Washington says is aimed at making bombs. But he warned that sanctions could be toughened if it refused.

"When they stick to their past view regarding suspending uranium enrichment, our answer will be: Iran will never suspend uranium enrichment," Foreign Ministry spokesman Hassan Qashqavi told reporters.

Washington, which cut ties with Tehran after the 1979 revolution that ousted the U.S.-backed shah, has been pushing hard to isolate Iran over its nuclear plans.

Iran, the world's fourth largest oil producer, insists it wants to master nuclear technology to generate electricity so it can save more of its oil and gas reserves for exports.

Enrichment is the part of Iran's program that most worries the West because, if uranium is enriched much more, it can make warhead material as well as being used to make fuel for power plants.

"If their (Washington's) new stance is to remove concerns about Iran's nuclear activities, we are ready for that. But our new expectation is ... that they should recognize our right to nuclear technology," Qashqavi said.

"The old policy was carrot and stick. This needs to change and transform into an interactive policy," he said.

During a presidential debate with Republican rival John McCain in October, Obama said his administration would work to restrict gasoline imports to Iran, which cannot make enough refined fuel to meet all domestic needs and has to import some.

Speaking on Sunday, Obama told a U.S. broadcaster: "We are willing to talk to them directly and give them a clear choice and ultimately let them make a determination in terms of whether they want to do this the hard way or the easy way."

Obama takes office on January 20.

"When they talk about change, everyone expects a changed policy to entail something very different to what President (George) Bush was following," Qashqavi said, adding everyone should "wait and see" what approach Obama would take in office.

Iran said last week it did not believe U.S. policy would change under Obama. Its refusal to stop enrichment, has drawn three rounds of U.N. sanctions since 2006, as well as separate U.S. measures.

(Reporting by Parisa Hafezi; Writing by Edmund Blair; Editing by Louise Ireland)