Iranian officials have been in talks with European Union foreign policy chief Javier Solana, who is seeking to coax the Islamic republic to suspend uranium enrichment.
But Mr Solana, who has held talks with Iran's top nuclear negotiator Ali Larijani, said Tehran had not agreed to halt the work despite four months of discussions and said it was time for Iran to decide if the dialogue should continue.
"We have reached common ground on an important number of issues but we have not agreed in what was the key point, which is the question of suspension of activities," Mr Solana told the European Parliament's foreign affairs committee.
The West accuses Iran of seeking to build nuclear weapons, but Iran, the world's fourth largest oil exporter, insists it only wants to master nuclear technology to make electricity.
But President Ahmadinejad said in a speech outside Tehran that Iran would not back down "one inch" against Western pressure for it to halt enrichment.
"We are ready to talk to remove the concerns. We want talks to continue but if anyone thinks talks can be used to pressure us they are wrong," Mr Ahmadinejad told the rally, broadcast live on state television.
"They are wrong if they think that the Iranian nation, in its path to obtain nuclear technology, will be stopped even for a second," the president said.
"The Iranian nation unanimously has one demand … which is obtaining its obvious right to nuclear technology," he told the crowd.
Mr Ahmadinejad often uses Iran's nuclear stand-off with the West as a rallying cry in his tours of the country.
Solana issues warning
Mr Solana warned Tehran that if negotiations did not bear fruit the international community would have to consider other options.
"The dialogue cannot last forever. It is up to the Iranians now to decide whether this time has come to an end. If this is the case, we will have to begin to follow the second track," which would be to take the matter to the United Nations Security Council.
Mr Solana said that Iran had a right to nuclear fuel for civilian uses but that that was best provided in conjunction with the West.
A negotiated solution, he added, could serve as a model for non-proliferation "to be followed by many countries".
Iran went back on its offer to allow France to monitor the enrichment of uranium on Iranian soil, saying the matter had yet to be decided.
The deputy head of Iran's atomic energy organisation, Mohammad Saeedi, had earlier proposed that France create a consortium to enrich uranium in Iran, to allay international concerns over the nature of Iran's nuclear program.