Iran opened a plant Saturday that produces heavy water which could be used to develop a nuclear bomb.

The ribbon was cut at the new plant just days after a Thursday United Nations deadline requiring Iran to halt uranium enrichment or face economic or political sanctions.

But at the opening ceremony for the new plant, Iranian President Mahmoud Ahmadinejad pledged it is intended for peaceful purposes only and and doesn't represent a threat to the world, even to Israel, which he described as "a definite enemy."

Iran has ignored the UN Security Council's resolution, calling it illegal.

The plant will be used for diagnosing cancer and other work in the pharmaceutical field, said Mohammed Saeedi, the deputy head of the Atomic Energy Organization of Iran, according to state-run television.

He was also cited as describing the facility as "one of the biggest nuclear projects" in the country.

The plant is capable of producing up to 16 tons of heavy water per year, according to reports.

On its own, the heavy water facility is benign. But Iran is also building a heavy water reactor, which is scheduled for completion in 2009.

The heavy water reactor, once completed, could run on natural uranium mined by Iran, as opposed to a light water reactor which would be fueled by enriched uranium.

Another concern is that the spent fuel left over from a heavy water reactor can be used as a source for plutonium, which can be used in a bomb.

Western nations have mainly been concerned about Iran's nuclear enrichment efforts.

On Tuesday, Iran gave its response to an incentive package offered up by the five permanent members of the Security council, plus Germany, which was intended to get Iran to roll back its program.

Iran said it is open to discussing the issue, but fell short of agreeing to a demand that Iran stop enriching uranium before talks will begin.

With files from The Associated Press