Iran is ready to revive talks with the world powers, President Mahmoud Ahmadinejad said Thursday, as toughening sanctions aim at forcing Tehran to sharply scale back its nuclear program.

Even so, he insisted that the pressures will not force Iran to give up its demands, including to continue enriching uranium, that led to the collapse of dialogue last year.

The United States and its allies want Iran to halt making nuclear fuel, which they worry could eventually lead to weapons-grade material and the production of nuclear weapons. Iran says its program is for peaceful purposes — generating electricity and producing medical radioisotopes to treat cancer patients.

The 27-member European Union imposed an oil embargo against Iran on Monday, part of sanctions to pressure Tehran into resuming talks on the country's nuclear program. It follows U.S. action also aimed at limiting Iran's ability to sell oil, which accounts for 80 per cent of its foreign revenue.

No date is set for the possible resumption of talks between Iran and the five permanent UN Security Council members plus Germany. Negotiations ended in stalemate in January 2011, and Iran later rejected a plan to send its stockpile of low-enriched uranium abroad in exchange for reactor-ready fuel rods.

'It is you who come with excuses': Ahmadinejad

Iran had previously indicated that it is ready for a new round of talks. Ahmadinejad is the highest-ranking official to make the offer.

He accused the West of trying to scuttle negotiations as a way to further squeeze Iran.

"It is you who come up with excuses each time and issue resolutions on the verge of talks so that negotiations collapse," Ahmadinejad said in a speech in Kerman in southeastern Iran. "Why should we shun talks? Why and how should a party that has logic and is right shun talks? It is evident that those who resort to coercion are opposed to talks and always bring pretexts and blame us instead."

A senior UN nuclear agency team is expected to visit Tehran on Saturday, the first such mission since a report in November that alleged Iran conducted secret weapons-related tests and that Tehran was on the brink of developing a nuclear weapon.

The delegation from the International Atomic Energy Agency will be led by Deputy Director General Herman Nackaerts, who is in charge of the Iran nuclear file, and include Peri Lynne Johnson, the agency's senior legal official.

Johnson will be the only American in the three-person team. While IAEA officials are formally neutral, her citizenship could bring added attention from Iranian hard-liners.

New enrichment facility built to withstand airstrikes

Iran begun uranium enrichment at a new underground site built to withstand possible airstrikes earlier this month, in another show of defiance against Western pressure to rein in Tehran's nuclear program.

Centrifuges at the bunker-like Fordo facility near Iran's holy city of Qom are churning out uranium enriched to 20 per cent. That level is higher than the 3.5 per cent being made at Iran's main enrichment plant at Natanz, central Iran, and can be turned into warhead material faster and with less work.

Iran says it won't give up its right to enrich uranium and produce nuclear fuel, but it has offered to allow the International Atomic Energy Agency inspectors to visit its nuclear sites to ensure that its nuclear program won't be weaponized.

Ahmadinejad also said sanctions and oil embargo will backfire because it has minimum trade with EU.

"Americans have not purchased Iranian oil for 30 years. Our central bank has had no dealings with them ... our (total) foreign trade is about $200 billion. Between $23 billion to $24 billion of our trade is with Europeans, making up about 10 per cent of our total trade ... Iran won't suffer," Ahmadinejad said. His comments were posted on state TV's website.