TEHRAN, Iran – Iran rejected a European demand to stop building a heavy-water nuclear reactor that provides a simpler way of extracting weapons-grade fuel, and it warned America yesterday “not to play with fire” by repeatedly threatening Tehran.

Iran has indicated previously it will keep its heavy-water reactor, but yesterday’s announcement that it will not replace it with a light-water reactor was the clearest statement yet of its nuclear plans and represented a hardening of its position.

Both types of plants can be used to enrich uranium, a critical nuclear bomb component, but the extraction of weapons-grade material from a light water reactor is more difficult. Uranium enriched to low grades is used for fuel in nuclear reactors, but further enrichment makes it suitable for atomic bombs.

The statement underscored the unresolved differences between Iranian and European negotiators, who are continuing their talks over Iran’s nuclear program even as America escalates its criticism of Iran.

Earlier this month, President Bush accused Iran in his State of the Union speech of being “the world’s primary state sponsor of terror” and pursuing nuclear weapons. Although Secretary of State Rice has said a military strike against Iran was “simply not on the agenda at this point,” Mr. Bush has said his administration would not rule out any option.

Yesterday, Foreign Ministry spokesman Hamid Reza Asefi reiterated previous statements by top officials that Iran would not tolerate any acts of aggression, particularly from America.

“Rice and other U.S. officials are aware of Iran’s capabilities.” Mr. Asefi told reporters at a news briefing. “During the talks with the Europeans, we told them in clear terms to tell their American allies not to play with fire, and the Europeans clearly got our message.”

President Khatami last week warned that Iran would turn into a “scorching hell” for any possible attackers.

Iran, according to experts, is believed to be at least four years away from finishing construction of the heavy-water reactor near Arak, in central Iran. Heavy-water reactors use natural uranium rather than the enriched form, which is costlier and more complicated to produce.

Mr. Asefi rejected a proposal by European negotiators to stop building the 40-megawatt Arak reactor in return for a light-water reactor – from which the extraction of weapons-grade material is difficult.

“We welcome the European offer … but this won’t replace the heavy-water research reactor at all. That will continue. We will pursue that,” he said.

Iran’s top leaders have been adamant in recent days that Iran will not scrap its nuclear program, suspected by Washington as a program to produce a nuclear bomb.

Mr. Asefi said Iran had long and intensive talks – “early steps forward” – with Europeans this week. He said Europe should step up its efforts to justify continuing the negotiations.

“During the talks, we tried to make it open that the nuclear fuel cycle has economic justification and that we will continue our activities in this field,” Mr. Asefi said.

Mr. Asefi also said Iran plans to become a major nuclear fuel supplier, part of a program that Iran says is for peaceful domestic energy purposes but Washington says is aimed at producing an atomic bomb.

“We intend to turn into an important and a major player in the nuclear fuel supply market in the next 15 years because there will be [an] energy shortage in the future,” Mr. Asefi said.

Separately, the Washington Post reported yesterday that America has been flying unmanned surveillance drones over Iran since last year to look for evidence of nuclear weapons programs and to probe the country’s air defenses.

Mr. Asefi did not comment on the report, saying, “It’s the job of the intelligence and security services to comment on this.”

Iran suspended uranium enrichment and all related activities in November, hoping to build trust and avoid U.N. Security Council sanctions. The International Atomic Energy Agency in Vienna, Austria, is monitoring the suspension.