The hard-line president's comments came a day after the U.N. nuclear watchdog agency issued a strongly critical report that could trigger new sanctions against Iran. The report said the country has expanded its uranium enrichment program in defiance of U.N. demands for a suspension, and it warned that the watchdog's knowledge of Iran's activities was shrinking.
President Bush responded to the International Atomic Energy Agency's report - and Tehran's continuing defiance - by saying Thursday that he would work with America's allies to push for tougher sanctions against the Iranian regime.
"We need to strengthen our sanctions regime," Mr. Bush said in a. Leaders of Iran "continue to be defiant as to the demands of the free world," he said.
The president said he had directed Secretary of State Condoleezza Rice to work with European partners to "develop further sanctions."
In a speech to a gathering of Iran's elite Revolutionary Guards, Ahmadinejad ruled out any temporary suspension, saying, "If we stop for a while, they (Iran's enemies) will achieve their goals. The enemy wants Iran to surrender so it won't have any say in the world."
"The aim of the enemies in thwarting Iran's exploitation of peaceful nuclear technology is not based on any technical reasons. They want to hit at the source of the (Iranian) regime's progress," he said, according to state-run television.
"If Iran's right to nuclear technology is confirmed, all nations of the world will gather under Iran's political banner. Enemies of Islamic Iran know this, and for this reason they have mobilized," Ahmadinejad said.
International Atomic Energy Agency head Mohamed ElBaradei urged the United States and other U.N. Security Council members to abandon "rhetoric" in the standoff with Iran and pursue dialogue, saying it was the best way to keep the country from acquiring nuclear weapons.
But in a reflection of international divisions on how to handle the crisis, the United States has lodged a complaint against ElBaradei for suggesting that Iran be allowed to keep some elements of its uranium enrichment program, diplomats said. They say the U.S. fears such comments from ElBaradei could undermine efforts to pressure Iran into fully scrapping the program.
Iran insists its nuclear program is peaceful, aimed only at developing energy, and it has touted the program as a sign of its technological prowess. The United States and its allies contend it is secretly aiming to develop nuclear weapons.
The U.N. Security Council has demanded Iran suspend uranium enrichment because the process can produce not only fuel for a reactor but also the material needed for a nuclear warhead.
CBS News has learned that Iran is continuing to make progress on its expanded efforts to enrich uranium — in spite of covert efforts by U.S. and other allied intelligence agencies to actively sabotage the country's nuclear program.
"Industrial sabotage is a way to stop the program, without military action, without fingerprints on the operation, and really, it is ideal, if it works," says Mark Fitzpatrick, the former Deputy Assistant Secretary of State for Non-Proliferation and now Senior Fellow in Non-Proliferation at the International Institute for Strategic Studies.
Meanwhile, Iran has detained an Iranian-American consultant working for George Soros' Open Society Institute, the latest U.S. citizen connected to a non-governmental organization to be seized in the country, the institute said Wednesday.
The detention of Kian Tajbakhsh comes amid a crackdown on NGOs at a time when Iranian authorities accuse the United States of using critics and dissidents to overthrow the country's hard-line government.