Iran's supreme leader insists his country is not seeking nuclear weapons, claiming that "holding these arms is a sin as well as useless, harmful and dangerous".
Nuclear weapons are a sin, says Iran's Ayatollah Ali Khamenei
However, after meetings with Iranian nuclear scientists and officials, Ayatollah Ali Khamenei did not mention a visit to Iran by the International Atomic Energy Agency, which said its experts had again failed to dent the country's refusal to cooperate in investigating allegations that Tehran covertly worked on an atomic arms programme.
Ayatollah Khamenei said Iran's policies would not change despite mounting international pressure against what the West says are Iran's plans to obtain nuclear bombs.
"With God's help, and without paying attention to propaganda, Iran's nuclear course should continue firmly and seriously," he said on state television.
As sanctions mount, ordinary Iranians are suffering from the effects of soaring prices and a collapsing currency. Several Iranian nuclear scientists have been killed during the past two years in bomb attacks that Tehran has blamed on its arch-adversary Israel.
In response, Iran has issued a series of statements asserting its right to self-defence and threatening to block the Strait of Hormuz, a vital oil tanker route.
The collapse of the nuclear talks came as Iran seems increasingly isolated, with some experts seeing the Islamic republic's mounting defiance in response to sanctions against its oil industry and financial institutions as evidence that it is in no mood to compromise with the West.
Elections on March 2 are expected to be won by supporters of Ayatollah Khamenei, an implacable enemy of the West.
The failure of the two-day visit by the IAEA could now hamper any resumption of wider nuclear negotiations between Iran and six world powers as the sense grows that Tehran feels it is being backed into a corner.
In the view of some analysts, the Iranians may be trying to keep their opponents guessing as to their capabilities, a diplomatic strategy that has served them well in the past.
"But they may be overdoing the smoke and mirrors and as a result leaving themselves more vulnerable," said professor Rosemary Hollis of London's City University.
A team from the IAEA had hoped to inspect a site at Parchin, south-east of Tehran, where the agency believes there is a facility to test explosives.
"It is disappointing that Iran did not accept our request to visit Parchin. We engaged in a constructive spirit, but no agreement was reached," said IAEA director general Yukiya Amano.
A western official added: "We think that if Iran has nothing to hide why do they behave in that way?"
"It is another missed opportunity," French deputy foreign ministry spokesman Romain Nadal said. "This refusal to cooperate adds to the recent statements made by Iranian officials welcoming the progress of their nuclear activities."
Iranian analyst Mohammad Marandi said providing the West with any more access than necessary to nuclear sites would be a sign of weakness.
"Under the current conditions it is not in Iran's interest to cooperate more than is necessary because the West is waging a war against the Iranian nation," he said.
Earlier, Iran's envoy to the IAEA, Ali Asghar Soltanieh, said Tehran expected to hold more talks with the UN agency, but Mr Amano's spokeswoman said no further meetings were planned.
Iran rejects accusations that its nuclear programme is a covert bid to develop a nuclear weapons capability, saying it is seeking to produce only electricity.
But its refusal to curb sensitive atomic activities, which can have both civilian and military purposes, and its record of years of nuclear secrecy has drawn increasingly tough UN and separate US and European measures.
The United States and Israel have not ruled out using force against Iran if they conclude that diplomacy and sanctions will not stop it from developing a nuclear bomb.
The failure of the IAEA's mission may increase the chances of a strike by Israel on Iran, some analysts believe.
But this would be "catastrophic for the region and for the whole system of international relations", Russian deputy foreign minister Gennady Gatilov said.
An IAEA report in November suggested Iran had pursued military nuclear technology and helped precipitate the latest sanctions by the European Union and the US.
One key finding was information that Iran had built a large containment chamber at Parchin to conduct high-explosives tests. The UN agency said there were "strong indicators of possible weapon development".
The IAEA said intensive efforts had been made to reach agreement on a document "facilitating the clarification of unresolved issues" in connection with Iran's nuclear programme.
"Unfortunately, agreement was not reached on this document," it said in an unusually blunt statement yesterday.
The IAEA mission's failure may reduce the chance of any resumption of wider nuclear negotiations between Iran and the six world powers - the US, China, Russia, Britain, France and Germany.
* Reuters with additional reporting by Associated Press