Western sanctions will not stop Iran from enriching uranium, President Mahmoud Ahmadinejad warned yesterday.
The stark announcement comes after top European negotiator Javier Solana conceded "endless hours" of talks with the Iranians had made little progress, and suggested the next stop might be the UN.
The talks had been seen as a last-ditch attempt to avoid a full-blown confrontation between Iran and the UN Security Council, after an August 31 deadline to suspend enrichment - a key step towards making nuclear weapons - was ignored.
But Mr Solana has told the European Parliament, the Iranians have made "no commitment to suspend".
He admitted the dialogue with the Iranians "cannot last forever", and it was up to Tehran to "decide whether its time has come to end".
Iranian leaders maintain the country's nuclear programme is for peaceful purposes - not to make a bomb - and therefore does not violate international law.
But Mr Solana suggested if talks end, the stand-off should be moved to the Security Council. In a speech shortly afterwards, Ahmadinejad warned sanctions would not dissuade his country from pursuing nuclear technology.
Speaking to the West, in front of a crowd of supporters, he said: "You are mistaken if you assume the Iranian nation will stop, for even a moment, from the path toward using nuclear energy, due to your nagging.
"For 27 years they haven't allowed us to use technologies that they possess.
"This nation is powerful and won't give in to one iota of coercion."
In an apparent response to Mr Solana's comments, the Iranian president said his nation favoured continued negotiations.
He said: "We are for talks. We can talk with each other and remove ambiguities. We have logic. We want talks to continue."
Foreign ministers of the United States, and five other major powers, are now expected to meet, possibly in London on Friday, to discuss the situation.
Diplomats said the Security Council could meet as early as Monday, to start work on a resolution imposing the first of a series of sanctions aimed at making Iran roll back its programme.
The US has insisted Tehran halts enrichment as a precondition for further talks, but Iran ignored the August 31 deadline set by the Security Council.
The Americans then agreed to let Solana hold more talks with the Iranians, after Russia, China and France spoke out against a rush to sanctions.
Initially, both Solana and Iran's top negotiator, Ali Larijani, signalled progress was being made.
However, yesterday diplomats said Larijani told Solana the hard-line Iranian leadership had rejected even a limited enrichment freeze.
One diplomat said Western council members favour an embargo on sales of nuclear or missile technology to Tehran as a first sanctions step. That would be followed by other sanctions, including travel bans on Iranian officials, and the freezing of their assets.
Iran has so far shown little concern about the prospect of such sanctions.