Iran says will not benefit from talks with US

TEHRAN (Reuters) - Iran's supreme leader said on Tuesday the country would not benefit from talks with the United States, playing down the significance of a prominent element in proposals to defuse a nuclear standoff.

Washington, which broke ties with Tehran in 1980, said it would join the European Union's direct talks with Iran if Iran first agreed to suspend uranium enrichment. The offer came in a package of incentives backed by six world powers.

The U.S. offer of talks was viewed as a major policy shift in Washington and by some analysts, particularly in the West, as a possible deal clincher. But Iran has shown no sign it is ready to stop enrichment and says it is suspicious of U.S. motives.

"Negotiating with America does not have any benefit for us and we do not need such negotiations," Supreme Leader Ayatollah Ali Khamenei was quoted as saying by state television.

Iran has yet to respond to the package but is under mounting Western pressure to give a reply by a mid-July summit of leaders from the Group of Eight industrial countries in Russia.

Iranian President Mahmoud Ahmadinejad has said Iran will reply by August 22. The United States says this is too long.

Analysts said Khamenei's remarks might indicate pessimism in the leadership that such talks would yield results and sent a message that Iran would not be swayed by a U.S. offer to meet.

"Iran is giving the message that Iran doesn't trust America and does not believe America has changed its position," said analyst Mahmoud Alinejad.

Khamenei did not rule out nuclear negotiations, although he insisted any such talks would be on Iranian terms.

"We will not negotiate with anybody on our certain right to reach and use nuclear technology. However, if they recognize this right for us, we are prepared to talk about international controls, supervision and guarantees, and the grounds for such negotiations have been prepared," Khamenei said.

Iranian officials have said Iran will not back down on what they say is Iran's right to produce nuclear fuel, a demand Western nations have said is unacceptable.

Alongside a U.S. offer of talks, the United States, China, Russia, France, Britain and Germany offered Iran civilian nuclear technology on condition it halts enrichment.

In March, it had looked like negotiations between Iran and the United States could go ahead to discuss the situation in Iraq, though not the nuclear issue. Khamenei had sanctioned a meeting but said Washington must stop its "bullying attitude."

Direct talks between the United States and Iran are rare. Most famously, they met in secret during the Iran-Contra scandal in the 1980s in which Washington supplied arms to Iran in return for Tehran's help releasing U.S. hostages held in the Lebanon.

Washington broke ties with Tehran shortly after the 1979 Islamic revolution when radical Iranian students held 52 Americans hostage at the U.S. embassy for 444-days.