"On the nuclear issue, the president reaffirmed to me Iran's preparedness and commitment to hold negotiations," Annan told a joint press conference with Iranian Foreign Minister Manoucher Mottaki.

But Ahmadinejad reiterated that Iran would not accept suspension of uranium enrichment before negotiations, said Annan, who had a meeting with the Iranian president earlier in the day. The UN chief said he hoped all parties concerned would find a way to move forward at a planned meeting between EU foreign policy chief Javier Solana and Iran's top nuclear negotiator Ali Larijanithis week.

On the Lebanon issue, Annan said, "He (Ahmadinejad) reaffirmedhis complete support for the implementation of (UN SecurityCouncil) Resolution 1701."

An Israel-Hezbollah fighting erupted on July 12 after two Israeli soldiers were captured and eight others killed by the Lebanese Shiite group in a cross-border attack. The conflict ended on Aug. 14 under the resolution.

Iranian Foreign Ministry spokesman Hamid-Reza Asefi said earlier in the day that Iran hoped to reach a consensus over its nuclear issue after the meeting between Larijani and Solana. "The situation would be more clear after the meeting and we hope to reach a consensus," Asefi told a press briefing. Solana is expected to hold talks with Larijani this week to clarify ambiguities in Iran's response to an incentive package offered by the United States, Russia, China, France, Britain and Germany.

Asefi said the exact date and place of the meeting were yet to be decided but it will be "within the next few days."The package includes both incentives aimed at persuading Iran to suspend uranium enrichment and possible sanctions if Iran does not comply.

Larijani delivered Tehran's written response to the package onAug. 22 and urged the six nations to get back to negotiations, saying Iran was ready to start "serious talks" over its nuclear program.

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

On Thursday, International Atomic Energy Agency chief Mohammed El Baradei presented a report to the Security Council, saying "Iran has continued enriching uranium despite a UN nuclear deadline forit to suspend or face possible sanctions."

U.S. President George W. Bush declared Thursday that "there must be consequences" for Iran for refusing to stop enriching uranium.

John Bolton, Washington's ambassador to the UN, chose to bemore specific, saying the Security Council must now draw upsanctions against Iran.

The European Union, however, agreed on Saturday to give Iranextra time, probably two weeks, to clarify ambiguities in itsresponse to the six-nation package.