Iran reiterated Monday it will not halt sensitive uranium enrichment work — which is at the centre of fears the country could acquire nuclear weapons — to resolve a standoff with the West.

"We are ready to discuss anything in negotiations … (but) we will not accept any preconditions," government spokesman Gholam Hossein Elham told reporters.

"Negotiations should respect everyone's rights and be pursued with equality and understanding," he said, adding that a halt to enrichment would put Iran in a state of "inequity".

The comments came as a draft resolution was being circulated in the UN Security Council which would require Iran to suspend all uranium enrichment and reprocessing activities.

The five permanent Security Council members plus Germany decided to send the Iran nuclear dossier back to the Security Council after Tehran failed to respond to a package of incentives in exchange for a suspension of enrichment.

Elham said that Iran "still considers the European offer a good opportunity to sort out Iran's nuclear issue with dialogue and diplomacy".

Iran insists it wants to enrich uranium solely to make reactor fuel and argues that this is a right under the nuclear Non-Proliferation Treaty.

Top nuclear negotiator Ali Larijani said Iran would respond to the nuclear offer by August 22.

Iran warned Sunday that it would retaliate against any Security Council resolution ordering it to stop uranium enrichment.