Speaking on the German television N24, Merkel said that Iran's answer had failed to say if it would suspend its enrichment of uranium and return to the negotiating table.

"The key sentence is missing from this answer and will have to be added later," she said.

Iranian President Mahmoud Ahmadinejad said Wednesday that his country would not give up its right of developing a full nuclear fuel cycle, the official IRNA news agency reported.

"Those who think they can deprive Iran of its right to peaceful nuclear technology are on the wrong track," the Iranian president told a rally in Iran's northwestern city of Bileh Savar.

"I declare to the world that Iran is able to achieve further breakthroughs given the efforts and determination of its people and youth," he said.

The United States has accused Iran of secretly developing nuclear weapons under a civilian front, a charge categorically denied by Tehran which says that its nuclear program is for peaceful purposes.

The UN Security Council adopted a resolution on July 31 urging Tehran to "suspend all enrichment-related and reprocessing activities, including research and development" by Aug. 31 or face the prospect of sanctions.

Ahmadinejad, who is on a tour to Iran's northwestern cities, said Tuesday that his country would not accept the UN Security Council resolution aimed at helping to solve the Iran nuclear issue.

The U.S. administration also said that Iran's response to the proposals by the five UN Security Council permanent members and Germany is unsatisfactory.