Iran will not back down on its nuclear programme despite economic problems caused by Western sanctions, President Mahmoud Ahmadinejad said on Tuesday.

"We are not people to retreat on the nuclear issue," he told a news conference in Tehran.

"If somebody thinks they can pressure Iran, they are certainly wrong and they must correct their behaviour," he said.

Ahmadinejad's comments came amid an accelerated slide in Iran's currency that he said was the result of an economic "war" waged by the West on the Islamic republic.

His vow that Iran would maintain its nuclear activities despite the pressure contradicted the US government's belief that the Western sanctions were working on Tehran.

"These are the most punishing sanctions we have ever been able to amass as an international community and they are very important for trying to get Iran's attention on the important denuclearisation work," State Department spokeswoman Victoria Nuland said in Washington on Monday.

In his media conference, Ahmadinejad also rowed back hints he laid during a visit to New York last week to attend a UN General Assembly that Iran could consider direct negotiations with the United States on the nuclear issue.

"Direct negotiation is possible, but needs conditions, and I do not think the conditions are there for talks. Dialogue should be based on fairness and mutual respect," he said.

Ahmadinejad on his return was criticised by hardliners in Iran for opening the door to the possibility of such negotiations.