Iran rejected the offer, saying it has a right to develop civilian nuclear power. Governments suspect Iran is secretly developing nuclear weapons.

"We call on Iran to respond to the updated incentives plan in a constructive manner," foreign ministers of the G8 rich countries said in a statement issued after a two-day meeting in Kyoto, Japan.

President Mahmoud Ahmadinejad was reported as saying on Thursday that Iran's "enemies" would never stop its nuclear activities.


The European Union agreed new sanctions on Monday targetting businesses and individuals linked to Iran's nuclear and ballistic missile programmes. The measures include a freeze on the assets of Iran's largest bank, Bank Melli.

In response, Iran said it would withdraw its assets from the EU, a report said this week.

The G8 foreign ministers also urged Iran to be more cooperative in dealings in its regional neighbourhood.

"We also urge Iran to act in a more responsible and constructive manner in the region, especially with regard to the Middle East peace process and the stability of Iraq and Afghanistan," the statement said.

Agencies