A fruitless visit to Iran by UN nuclear inspectors raised tensions on Wednesday, with Russia warning of "catastrophic" consequences if it leads to a military attack on its Middle East ally.
The United States expressed disappointment, and France said Iran's refusal to let the inspectors in to a key military site was a "missed opportunity" that could undermine chances of reviving wider talks between Tehran and world powers.
But as worries over Iran pushed world oil prices to nine-month highs, Iran's supreme leader, Ayatollah Ali Khamenei, was defiant.
He made no mention at all of the International Atomic Energy Agency (IAEA) inspectors, instead reiterating the assertion that "the Iranian nation has never been seeking an atomic weapon and never will be."
Possessing a nuclear bomb "constitutes a major sin," he told a group of atomic scientists, but nuclear energy "is in Iran's national interest."
"Pressure, sanctions, threats and assassinations will not bear any fruit and Iran will continue its path of (nuclear) scientific development."
The IAEA said it had gone into the two-day visit, and an inconclusive one last month, in a "constructive spirit," but that no agreement had been reached on efforts to elucidate Iran's nuclear activities.
Despite requests, "we could not get access" to a military site in Parchin where suspected nuclear warhead design experiments were conducted, team leader and chief inspector Herman Nackaerts said on returning to Vienna.
IAEA chief Yukiya Amano said the refusal to allow the Parchin inspection was "disappointing," and the UN watchdog said that "at this point in time" there was no agreement with Iran on holding further talks.
A Western diplomat in Vienna said Iran's posture on Parchin showed why the world community "lacks confidence in the nature of its nuclear programme."
"This latest snub, along with its decision to begin enrichment at Qom, underscore Iran's defiance of the international community and multiple Security Council resolutions," said the diplomat.
But Iran's envoy to the IAEA urged the watchdog not to "perturb the climate of cooperation," saying talks would continue.
"During the past two days, we raised technical and legal matters. Technical answers were provided to the agency's questions," Ali Asghar Soltanieh was quoted by state television's website as saying.
"This posture of cooperation and dialogue will continue, and we advise (the IAEA) to avoid perturbing the climate of cooperation."
"Proposals were made" to advance cooperation between Iran and the IAEA, "but to reach a final accord, we need more time. And we have agreed to continue discussions."
The IAEA trip was seen as having an impact on the mooted resumption of talks between Iran and the P5+1 powers -- Britain, China, France, Russia and the United States, plus Germany -- which broke down 13 months ago.
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France said Iran's "refusal to cooperate" was "another missed opportunity."
"We cannot but consider all of this contrary to the intentions" declared by Iran to resume negotiations with the world powers, said a spokesman.
White House spokesman Jay Carney said "we regret the failure of Iran to reach an agreement with the IAEA. It's another demonstration of Iran's refusal to abide by its international obligations."
Referring to Parchin, Soltanieh said: "For every visit, it is necessary to fix a framework and rules taking into consideration both parties."
Oliver Thraenert, an analyst with the German Institute for International and Security Affairs, said the IAEA visit "shows clearly that Iran is not in the mood for substantial compromise," adding that the chances of negotiations now resuming were "not very high."
Talk of possible military action against Iran by Israel, with or without US help, had lent urgency to diplomatic attempts to lower tensions.
Russia, which along with China has been giving Iran diplomatic cover, warned against that prospect.
"The scenario of military action against Iran would be catastrophic for the region and possibly the whole system of international relations," said Deputy Foreign Minister Gennady Gatilov.
The United States and Europe have been ramping up economic sanctions on Iran since November, when the IAEA published a report crystallising -- though not entirely validating -- Western suspicions it was pursuing nuclear weapons research in Parchin and elsewhere.
The measures, targeting vital oil exports, added to four sets of non-economic UN sanctions.
Iran has repeatedly said the embargo will not deter it from its nuclear ambitions, and it has threatened to strike back at any military action, possibly by closing the strategic Strait of Hormuz.
This week, it deployed warplanes, missiles and radar facilities in exercises to boost the defences of its nuclear facilities.
Iran has also halted the limited amount of oil it exported to Britain and France and threatened to cut supplies to other EU states in retaliation for an EU oil embargo due to come fully into effect in July.
In the markets, Brent North Sea crude for delivery in April soared as high as $123.07 per barrel and New York's main contract, light sweet crude for April, jumped to $106.47 dollars -- levels last seen in early May 2011.
"Once again, oil prices are firming on concerns about rising tensions between the West and Iran," GFT analyst David Morrison told AFP.
Capital Economics analyst Julian Jessop warned that "Brent might spike as high as $210 in a worst-case scenario involving the closure of the Strait of Hormuz."