SHANNON, June 26: The United States, the European Union and the UN's nuclear watchdog condemned Iran on Saturday for deciding to resume a production process that could make purified uranium for an atomic bomb.

They urged Iran, which says its nuclear ambitions are peaceful, to rethink its decision to produce parts again for centrifuges that can purify uranium. The head of the International Atomic Energy Agency (IAEA), Mohamed ElBaradei, said he hoped the move was temporary.

But a joint US-EU statement, issued after talks between US President George W. Bush and European leaders in Ireland, stopped short of threatening new action to punish Iran for breaking a deal it struck with Britain, France and Germany.

"The United States and the European Union expressed united determination to see the proliferation implications of Iran's nuclear programme resolved," the statement said.

"In this connection, the US and EU were disturbed by Iran's recent announcement of its intention to resume manufacturing and assembly of centrifuges and called on Iran to rethink its decision," it added.

Echoing EU and US concerns, ElBaradei said: "I hope Iran will go back to the full suspension they have committed themselves to."

In the first Iranian reaction to the EU-US statement, a newspaper editor appointed directly by Iran's Supreme Leader, Ayatollah Ali Khamenei, hinted that the country might now consider pulling out of the nuclear Non-Proliferation Treaty.

"The (EU-US) statement shows Iran is reaching its last option in having access to peaceful atomic energy, that is pulling out of the Non-Proliferation Treaty," said Hossein Shariatmadari, editor of the hardline Kayhan daily. A letter from Iran to the IAEA, seen by Reuters, told the agency that Tehran "intends to resume, under IAEA supervision, manufacturing of centrifuge components and the assembly and testing of centrifuges as of 29 June".

RETALIATION: Iran's decision was a retaliation against an IAEA resolution last week that "deplored" Iran's failure to cooperate fully with IAEA inspectors.

But Iran also pledged in the letter to continue to allow IAEA inspectors access to nuclear sites for short-notice, intrusive inspections under the IAEA's so-called Additional Protocol, which Tehran signed last year but has yet to ratify.

Asked when the IAEA would be inspecting a site in Tehran called Lavizan, where all the buildings have been razed and the topsoil removed, ElBaradei said "soon". However, there was no evidence that Iran was hiding anything there, he added.

Washington says Iran razed the site in an attempt to cover up signs of activities related to what it says is Tehran's secret atom bomb programme.

Tehran denies wanting nuclear weapons and insists its nuclear programme is aimed solely at generating electricity.

Iran promised France, Germany and Britain in October it would suspend all activities related to uranium enrichment, a process of purifying uranium for use as fuel for nuclear power plants or weapons, in exchange for peaceful nuclear technology.

Centrifuges are machines that purify uranium gas by spinning at supersonic speeds.

Germany, Britain and France have adopted a strategy of engagement with Iran that contrasts sharply with the US policy of isolating Iran and threatening it with U.N. Security Council sanctions for violating its obligations under the nuclear Non-Proliferation Treaty (NPT).-Reuters