VIENNA, Jan 26: The EU has called on Iran to dismantle its nuclear fuel cycle activities, hardening its earlier stand that Iran should only suspend uranium enrichment, a diplomat said on Wednesday.

In talks in Geneva earlier this month, representatives of Britain, France and Germany told Iran that "nothing short of full cessation and dismantling of Iran's fuel cycle efforts would give the EU3 the objective guarantees they need that Iran's nuclear program is peaceful," a diplomat said.

On Jan 17, the EU and Iran held a second round of talks on a potentially lucrative trade pact after a deal clinched in November by the European bloc's three most powerful members - the so-called EU3 of Britain, France and Germany - under which Iran would suspend uranium enrichment.

The trade deal forms part of a package of possible incentives Iran could earn if the talks also manage to produce "objective guarantees" the country is not seeking to develop nuclear weapons as charged by the United States.

Iran has agreed to suspend uranium enrichment activities while the talks are in progress. The country insists it only wants to produce fuel for nuclear reactors, but there are fears the sensitive fuel cycle work could be geared towards making weapons.

The diplomat said the EU trio had agreed not to give Iran any "goodies until progress was made in the nuclear working group. "The nuclear working group is setting the pace for the package of incentives," the diplomat said.

KHATAMI CONDEMNS US: Iranian President Mohammad Khatami, responding to comments by a senior US official that Iran tops the list of world trouble spots, said on Wednesday the United States was the country which most endangered global peace.

"You look around the world at potential trouble spots, Iran is right at the top of the list," US Vice President Dick Cheney said last week on the day George Bush was sworn in for a second four-year term as president. Mohammad Khatami, speaking to reporters after a meeting with Afghanistan's President Hamid Karzai, responded in kind.

"We say that America is at the top of the list of countries which are endangering world peace and security and we hope that one day they come to their senses," he said, adding he thought a change in U.S. policy was very unlikely.

Iran denies US and Israeli accusations that its nuclear facilities would be used to make atomic bombs. It says its nuclear ambitions do not stretch beyond generating electricity.

In a bid to allay concerns about its nuclear programme Iran has agreed to halt activities which could be used to make nuclear bomb material, such as uranium enrichment, and to try to reach a negotiated solution with the European Union. "Negotiations with the EU) haven't reached a dead end," President Khatami said. -AFP