Israel rejected the assurance saying it was not "fooled" by President Ahmadinejad's words and recalling how the Iranian leader has in the past called for the destruction of the Jewish state.
Iran's president said his aim was nuclear energy and that his country posed to no nuclear threat to Israel.
He was speaking as he opened the Arak plant which will supply heavy water to be used as a coolant for a research reactor due for completion by 2009.
The International Atomic Energy Agency has expressed concern over the risk of diversion of nuclear materials as the research reactor could produce 8-10 kilograms of plutonium a year, enough to make at least two nuclear bombs.