KHONDAB, Iran - Iran's hard-line president on Saturday inaugurated a heavy-water production plant, a facility the West fears will be used to develop a nuclear bomb, as Tehran remained defiant ahead of a UN deadline that could lead to sanctions.

The UN has called on Tehran to stop the separate process of uranium enrichment -- which also can be used to create nuclear weapons -- by Thursday or face economic and political sanctions.

President Mahmoud Ahmadinejad declared that his nation's nuclear program poses no threat to other nations, even Israel, "which is a definite enemy."

Ahmadinejad said in a speech that Iran would never abandon what he once again called its purely peaceful nuclear program.

"There is no discussion of nuclear weapons," he said. "We are not a threat to anybody even the Zionist regime, which is a definite enemy for the people of the region."

Though the West's main worry has been enrichment of uranium that could be used in a bomb, it also has called on Iran to stop the construction of a heavy-water reactor near the production plant that Ahmadinejad inaugurated.

A senior Israeli lawmaker warned in a statement that the plant inauguration marks "another leap in Iran's advance toward a nuclear bomb."

Israeli legislator Ephraim Sneh of the Labor Party, a partner in the ruling coalition, said that the Jewish state must "prepare itself militarily." Ahmadinejad last year called for Israel to be "wiped off the map."

The spent fuel from a heavy-water reactor can be reprocessed to extract plutonium for use in a bomb.

Reactors fueled by enriched uranium use regular -- or light -- water in the chain reaction that produces energy. Heavy water contains a heavier hydrogen particle, which allow the reactor to run on natural uranium mined by Iran, forgoing the enrichment progress.

Vice President Gholamreza Aghazadeh, who also heads the Atomic Energy Organization of Iran, said the heavy-water facility will be used to treat and diagnose AIDS and cancer, and for other medicine and agricultural purposes.

Iran is scheduled to complete the reactor in 2009.

Iran responded Tuesday to package of incentives, presented by the five permanent members of the Security Council plus Germany, for it to halt uranium enrichment and return to negotiations on increasing international oversight of its nuclear program. Tehran said it would be open to negotiations but did not agree to the West's key demand to halt enrichment as a precondition to talks.

The International Atomic Energy Agency, the UN nuclear watchdog, will report on the state of Iran's program by mid-September. If its report finds that enrichment is continuing, the council could move toward sanctions.

Tehran has called the Security Council resolution that set the Thursday deadline "illegal" and has insisted it won't give up its nuclear program.

"They may impose some restrictions on us under pressure. But will they be able to prevent the thoughts of a nation?" Ahmadinejad said Saturday. "Will they be able to prevent the progress and technology to a nation? They have to accept the reality of a powerful, peace-loving and developed Iran. This is in the interest of all governments and all nations whether they like it or not."

Mohammed Saeedi, the deputy head of Iran's atomic organization, called the heavy-water plant "one of the biggest nuclear projects" in the country, state-run television reported.