Iran said Sunday it would work to settle disputes over its atomic program if its case went back to the U.N. nuclear watchdog agency ¡ª a stance far from Western demands that it suspend uranium enrichment.

Foreign Ministry spokesman Mohammad Ali Hosseini said Iran could agree to settle outstanding issues with the International Atomic Energy Agency, but only if the U.N. Security Council turned the country's nuclear file over to the U.N. watchdog, the International Atomic Energy Agency, and dropped preparations to debate further sanctions.

The news comes days after an official in Spain said Iran had pledged to end years of stonewalling and provide answers about past suspicious nuclear activities to the IAEA.

If Iran was to follow through on that pledge, it could help the IAEA wrap up years of efforts to establish whether Iran's past nuclear strivings were exclusively peaceful in nature ¡ª as Iran insists.

But Hosseini's comments and the offer, which Iran's top nuclear negotiator Ali Larijani made to the EU's foreign policy chief, Javier Solana, during talks in Madrid last week, fell short of Security Council's demands that Iran freeze uranium enrichment.

The Security Council first imposed sanctions on Iran in December and modestly increased them in March over Iran's refusal to suspend enrichment. The council is now preparing to debate more punitive measures.

"All should know that the possible third resolution on sanctions, and more restrictions on Iran will not dissuade us from our way," Hosseini said.

Iran's ultimate stated goal is running 54,000 centrifuges to churn out enriched uranium for what it says is power generation. But the U.S. and Israel accuse Iran of seeking to use the technology to develop nuclear weapons.

Also Sunday, President Mahmoud Ahmadinejad lashed out at Iran's regional enemy and U.S. ally, Israel, saying the world would witness the Jewish state's destruction soon.

"God willing, in the near future we will witness the destruction of the corrupt occupier regime," Ahmadinejad was quoted as saying by the state-run news agency, IRNA.

Israeli Foreign Ministry spokesman Mark Regev responded Sunday: "Ahmadinejad offers only death and destruction. Today he is the most serious challenge to regional peace and security,"

In October 2005, Ahmadinejad caused international outrage when he said in a speech that Israel's "Zionist regime should be wiped off the map." Ahmadinejad's supporters have argued that his words were mistranslated and should have been translated from Farsi to English as saying Israel would "vanish from the pages of time," implying it would vanish on its own rather be destroyed.

In an interview with U.S.-based ABC television earlier this year, Ahmadinejad, who also has called the Holocaust a "myth," compared Israel to the Soviet Union, saying, "What happened to the former Soviet Union? It disappeared, disappeared from the face of the Earth. Was it because of war? No. It was through the decision of the people."

Iran also had harsh words for President Bush on Sunday, saying the American leader was intervening in the country's domestic affairs when he demanded the release of four Iranian-Americans detained on allegations of espionage.