A prominent MP warned Monday that Iran could halt cooperation with inspectors from the UN's International Atomic Energy Agency (IAEA) and even quit the nuclear Non-Proliferation Treaty.

"If the United Nations adopts a resolution, it could lead to examining suspension of Iran's membership to the NPT and revising Iran's cooperation with the IAEA," Alaeddin Borujerdi, head of the parliamentary national security commission told Mehr news agency.

Iran's leadership has also signalled that Israel's attacks against the Palestinian territories and Lebanon have undermined the chances of a diplomatic solution to the row by putting the Islamic republic in no mood for compromise.

President Mahmoud Ahmadinejad said the Middle East crisis had made it "clear that international organisations have become a tool in the hand of domineering powers".

"The incidents in Lebanon and Palestine have influenced our examination," he said of Iran's consideration of an international offer of incentives in exchange for a halt of sensitive atomic work.

Iran is a major backer of the Palestinian militant group Hamas and the Lebanese Shiite movement Hezbollah, but denies providing arms.

"The government is determined to fully exploit the rights of the Iranian nation," Ahmadinejad said, underlining Tehran's continued unwillingness to accept the terms of the international offer.

Iran says it only wants to enrich uranium to the levels needed for reactor fuel and that this is a right enshrined by the nuclear Non-Proliferation Treaty. But the process can be extended to make weapons.

"Nuclear energy is clean and renewable, and all nations have the right to use it," the president said Sunday.

With Iran accused of trying to buy time, the Security Council is expected this week to pass a draft resolution that gives Tehran until August 31 to halt enrichment. A refusal to comply would prompt discussions on economic and political sanctions.

"By putting pressure and trying to intimidate Iran, no country will achieve anything. On the contrary, the situation will worsen," foreign ministry spokesman Hamid Reza Asefi warned Sunday.

Iran has already ignored a non-binding Security Council demand to halt enrichment.

"If tomorrow they pass a resolution against Iran, the package will not be on the agenda any more," he said of the international offer, which the five Security Council members plus Germany hope will still be accepted.

When asked to elaborate on what specific measures Iran might take, Asefi replied: "They know what I am talking about."

They have also played up Iran's regional clout and oil wealth, and Asefi said that "issuing this resolution will worsen the crisis in the region".

Diplomats close to the issue said the expected UN resolution will mark a turning point in the three-year-old crisis, which kicked off when the UN's atomic watchdog sounded the alarm over nearly two decades of undeclared nuclear work in Iran.

"The Iranians are aware that defying a Security Council resolution is a very serious thing," said a Tehran-based diplomat, who asked not to be named.

"But for the time being they appear to be digging in for confrontation, and there is no indication that the position will change anytime soon," he said.

Another senior envoy said he saw little chance of Iran complying with the expected resolution.

"I think Iran will wait to see what kind of sanctions it is likely to face if it ignores the deadline. We are moving into a period of brinksmanship here," he said.

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