State television quoted Foreign Minister Kamal Kharrazi as saying Saturday, "The European proposal has no value."
A Foreign Ministry spokesman said Sunday the 35-page EU proposal, which included an offer of fuel and other assistance for a civilian nuclear program, was rejected, in part, because it did not recognize Iran's right to enrich uranium.
The European offer, made Friday by British, French and German officials, was accompanied by a call for an emergency meeting of the U.N. nuclear watchdog agency to discuss the Iranian situation.
Although diplomats stressed the International Atomic Energy Agency meeting, set for Tuesday, was not the first step towards a military move against Iran, German Chancellor Gerhardt Schroeder warned Iran could face action from the U.N. Security Council.
"If Iran doesn't back down, one has to expect it will be referred to the Security Council," Schroeder told German ARD Television. "If that happens we will be talking about possible sanctions. This would not be good for either side. Therefore I have to say I am very worried by Iran's apparent decision to choose a course of confrontation."
On Sunday, Iranian officials acknowledged they may face U.N. action, but said they would not change their mind about their decision to begin reprocess of creating enriched uranium, a vital component of any military nuclear weapons program.
"Although we think referral of Iran's case to the Security Council would be unlawful and politically motivated, if one day they refer Iran's case...we won't be worried in the least," said Foreign Ministry spokesman Hamid Reza Asefi, according to Reuters.
Iran's decision to reject the European offer came as the conservative mayor of Tehran, Mahmoud Ahmadinejad, took the oath of office as the Islamic republic's new president.
Although Ahmadinejad did not refer specifically to the ongoing nuclear standoff, he did outline his goals for the nation's foreign policy and vowed to defy international pressure.
"We want peace and justice for all and they are the integral part of our foreign policy," he said. "I stress on these two principles so that countries which use the instrument of threat against our nation know that our people will never give up its right to justice."
"I don't know why some countries do not want to understand that the Iranian people will never give in to pressure," he added. "When people see such attitude, resistance grows in them and achieving a national right becomes an ideal."
According to Iranian officials, the country's official response to the EU would be delivered on Monday, one day ahead of the IAEA meeting.