President Mahmoud Ahmadinejad did not directly address the deadline but maintained Iran's right to nuclear technology in a speech to a cheering crowd of thousands in Orumiyeh in northwestern Iran.

"The Iranian nation will not succumb to bullying, invasion and the violation of its rights," Ahmadinejad told a crowd of thousands.

Foreign Ministry spokesman Hamid Reza Asefi shrugged off the possibility of sanctions, telling state-run television that Iran "will find a way to avoid pressure eventually,"

The deadline was widely reported on the front pages of major Iranian newspapers. The daily Aftab said the showdown offers "the enemies" a chance to ratchet up pressure on Iran.

Another newspaper, Kargozaran, expressed doubt that the US would muster enough support within the Security Council for punitive sanctions.

Washington also continues to hold open the possibility that it and its allies as the next step might pursue a course outside the UN Security Council and impose penalties of their own against Iran.

Iran could theoretically still announce a full stop to uranium enrichment before a late Thursday deadline to do so, set by the Security Council. But that appeared unlikely, given Ahmadinejad's speech and new findings by the International Atomic Energy Agency that Iran was enriching small quantities of uranium as late as Tuesday.