SEOUL/MANILA - World powers could have a package of measures against Iran within weeks, U.S. President Barack Obama said on Thursday, warning Tehran of consequences for its failure to respond to an offer of a nuclear deal.

However, Iranian Foreign Minister Manouchehr Mottaki dismissed talk of further punitive sanctions, saying the West had learnt from past failures.

Iran on Wednesday rejected a deal to send enriched uranium abroad for rendering into fuel for medical purposes in Tehran, defying world powers which regarded the offer as a way to delay Iran's potential ability to make atomic bombs by at least a year by divesting the country of most of its refined uranium stock.

Under the plan brokered by the U.N. nuclear watchdog, Iran would ship some 75 percent of its low-enriched uranium to Russia and France, where it would be converted into fuel plates for a Tehran reactor that makes isotopes for cancer treatment.

Iran has taken weeks now and has not shown its willingness to say yes to this proposal ... and so as a consequence we have begun discussions with our international partners about the importance of having consequences, Obama said at a joint news conference with South Korean President Lee Myung-bak in Seoul.

He said Iran would not be given an unlimited amount of time, likening the Iranian nuclear issue to years of stop-and-start negotiations with North Korea about its nuclear ambitions.

We weren't going to duplicate what has happened with North Korea, in which talks just continue forever without any actual resolution to the issue, said Obama.

He has advocated a policy of increased engagement, rather than confrontation, on thorny international issues.

NO FINAL ANSWER

However, Russia said on Thursday Iran had still not given its final response to the proposed fuel deal.

As far as we know, there has so far been no final official answer from Tehran, Foreign Ministry spokesman Andrei Nesterenko said in a statement. There is currently no discussion on working out additional sanctions against Iran.

In apparent response to Obama's comments, Iran's President Mahmoud Ahmadinejad reiterated in a speech in Tabriz that Iran would respond positively to a change in big powers' policy.

I am speaking to the world powers: Those who say they want to have a constructive interaction should know that if the Iranian nation sees a practical change in their behavior and that they have given up their aggressive attitude and honestly raised a hand to Iran, then we would accept it, he said.

But if we find they are still continuing their past domineering and hostile policies ... then the response of the Iranian national would be as firm as in the past.

During a visit to the Philippines, Mottaki shrugged off the possibility of further sanctions. Sanction was the literature of the 60s and 70s, he told a news conference in Manila.

I think they are wise enough not to repeat failed experiences, he said, speaking through an interpreter. Of course, it's totally up to them.
Mottaki said the Islamic Republic was willing to discuss the reactor fuel deal but only if the swap of enriched uranium for the fuel took place within Iran.

Iran raises its readiness in order to have further talks within the framework which is presented, he said. It's not our proposal to have a swap. They raised such a proposal and we described and talked about how it could be operationalised.

TROJAN HORSE

Obama said he still hoped Iran would change its mind.

Our expectation is that, over the next several weeks, we will be developing a package of potential steps that we could take, that would indicate our seriousness to Iran, he said.

He said he had confidence in the approach to Iran, which rejects suspicions that its declared program to enrich uranium for electricity generation is a Trojan horse for efforts to produce atomic bomb fuel.

I continue to hold out the prospect that they may decide to walk through this door. I hope they do, he said.

But what I'm pleased about is the extraordinary international unity that we've seen. If you think at the beginning of the year, how disjointed international efforts were and how uneven perceptions were about Iran's nuclear program, and where we are today, I think it's an indication that we've taken the right approach.

Russia and France also pushed Iran to accept the deal as is.

Diplomats say the six major powers are disunited over how tough the next sanctions should be. Russian and Chinese reservations, they say, all but ensure the next round will be largely symbolic, such as adding names to a U.N. blacklist for asset freezes and travel bans, rather than harsh measures targeting Iran's lifeblood oil and gas sector.

Iran says it needs nuclear technology to generate power but its history of secrecy and restricting U.N. inspections have raised Western suspicions of a covert quest for atom bombs.

(Additional reporting by Manny Mogato in Manila and Conor Humphries in Moscow; Editing by Andrew Dobbie)

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