Iran's letter to America cuts no ice in nuclear crisis

European countries agreed last night to work on a new package of proposals including incentives for Iran, in an attempt to break a deadlock in the UN Security Council over the Iranian nuclear programme.

The move came after China and Russia blocked stern punitive action against Tehran. There was also deadlock between the US and Iran after the White House dismissed a letter from President Ahmedinejad to George Bush.

Speaking in Florida yesterday, Mr Bush did not even mention the missive from his Iranian counterpart - believed to be the first such communication between leaders of the two countries since they severed relations in the wake of the 1979 US embassy hostage crisis.

White House officials said the letter was no more than an extended lecture.

In it, Mr Ahmedinejad scolds the US for lying about the reasons for the Iraq war, for its support of Israel and even for supposedly keeping secret "various aspects" of the 2001 terrorist attacks. It chides Mr Bush for acting in an un-Christian manner, and points to the "ever increasing global hatred of the American government".

It does not directly address the nuclear issue, and the uranium enrichment programme that is at the heart of the West's fears that the Islamic regime is secretly pursuing nuclear weapons capability. The closest it comes is to complain that any technological and scientific achievement in the Middle East "is portrayed as a threat to the Zionist regime". The Iranian President asks "Was not scientific R&D a basic right of nations?" - a reiteration of Tehran's defiant stance.

As the text of the letter became known, the fault lines in the UN re-emerged when China and Russia made clear their opposition to a harsh Security Council resolution against Iran, which the US and its European allies had been hoping to secure this week.

Beijing and Moscow fear that the Chapter 7 resolution sought by Washington could open the way to sanctions against Iran and, ultimately, military action - just as the US claimed resolution 1441 from 2002 was the authority for the invasion of Iraq the following year.

The prospects for agreement this week "are not substantially good", a US official said after a dinner of the foreign ministers of Britain, France, the US, Russia, China and Germany. However, a meeting of senior officials of the five veto-holding Security Council powers in New York agreed last night that European diplomats would draw up proposals spelling out a choice of benefits or sanctions for Iran to comply with UN demands. The proposals will be presented to EU foreign ministers in Brussels next Monday.

Ali Larijani, Iran's chief nuclear negotiator, insisted his country had no plans to pull out of the Nuclear non-Proliferation Treaty, committing signatories to pursue nuclear power exclusively for civil ends. He also said the proposal for Russia to enrich uranium on Iran's behalf - something Tehran had earlier seemed to reject - was still a possibility, "though time would be required".