U.N. Secretary-General Kofi Annan is urging Iran to "lift the cloud of suspicion" hovering over its nuclear activities.

Kofi Annan delivers a speech at Tokyo University

Speaking to university students Thursday in Tokyo, Mr. Annan said that it is of great concern that the International Atomic Energy Agency has still not been able to verify that Iran's nuclear program is purely for peaceful purposes

He also called for toning down the rhetoric in the nuclear standoff. Mr. Annan added that he remains confident that current diplomatic efforts will generate new momentum toward a negotiated solution.

On Wednesday, Iran's President Mahmoud Ahmadinejad ridiculed a possible European offer of incentives for ending Tehran's sensitive nuclear work.

The United States said the Iranian leader's pre-emptive rejection of the pending offer is an odd stance that raises questions about his motives in the confrontation.

Britain, France and Germany are drawing up a package of incentives, including a light-water nuclear power plant, for Iran.

Senior diplomats from the five permanent U.N. Security Council members and Germany are expected to meet in London next week to discuss the incentives package.

That meeting was originally scheduled for Friday.

Western powers suspect Iran is enriching uranium to make nuclear weapons - a charge Tehran denies.

Some information for this report was provided by AP and Reuters.