Vienna, Austria ? Iran’s president said Tuesday he will submit new proposals in negotiations over his country’s nuclear program but denounced a European offer of aid as an “insult,” as the U.N. nuclear agency tried to resolve the crisis without referring Tehran to the Security Council.

While the International Atomic Energy Agency board considered a new warning to a defiant Iran to suspend its atomic activities, fresh areas of concern emerged Tuesday.

An exiled dissident said Iran recently produced 4,000 centrifuges capable of enriching uranium to weapons grade. Alireza Jafarzadeh, who helped uncover details of Iran’s program in 2002 that fueled U.S. suspicions the country was trying to build a nuclear bomb, told The Associated Press the centrifuges are ready to be installed at the nuclear facility in Natanz.

In Tehran, Iran announced it has improved the range and accuracy of its Shahab-3 missile. It said the weapon can strike targets up to 1,200 miles away nearly dead-on – a statement sure to unnerve Western officials who fear the regime one day will be able to fit such missiles with nuclear warheads.

Mahmoud Ahmadinejad, the country’s new president, spoke Tuesday with U.N. Secretary-General Kofi Annan and said Iran was willing to continue the negotiations with the Europeans.

“We are ready to proceed with talks. Of course, I will put forward initiatives in this respect after forming my Cabinet,” Ahmadinejad told Annan.

President Bush welcomed Ahmadinejad’s willingness to continue to negotiate but said he was “deeply suspicious” of Iran.

“Iranians are getting a message, that it’s not just the United States that’s worried about their nuclear programs, but the Europeans are serious in calling the Iranians to account and negotiating,” he said.

Bush said that if Iran does not cooperate, United Nations sanctions are “a potential consequence.”

However, diplomats said there was little stomach for reporting Tehran to the Security Council, in part out of fears that such a move might inflame support within Iran for the regime’s nuclear ambitions and scuttle any chances at winning the country over with economic incentives.

An IAEA draft resolution obtained by the AP does not mention the Security Council.

Jafarzadeh, the Iranian dissident, said his information on the centrifuges came from sources within the Tehran regime who have proven accurate in the past. He described the information as “very recent” and unknown to the IAEA.