TEHRAN, Iran - Iran's president said Wednesday he is willing to build a new relationship with the United States and is preparing new proposals aimed at breaking the impasse with the West over his country's nuclear program.

The speech by hard-liner Mahmoud Ahmadinejad took an unusually conciliatory tone at a time when President Barack Obama's administration has signaled it wants to reach out to Iran and start a dialogue. It was the latest indication that the longtime adversaries are searching for a formula to begin talks, though there have been no concrete breakthroughs yet.

"The Iranian nation is a generous nation. It may forget the past and start a new era, but any country speaking on the basis of selfishness will get the same response the Iranian nation gave to Mr. Bush," Ahmadinejad told thousands in the southeastern city of Kerman.

He spoke a day after the Obama administration said its immediate goal was to get Iran back to nuclear negotiations. Though the U.S. government declined to publicly discuss possible new strategies for dealing with Tehran, one senior official said they could involve allowing Iran to continue enriching uranium at its current level for some time.

While the Bush administration had long insisted Iran scrap its enrichment program -- a demand Iran repeatedly rejected -- two years ago Washington briefly softened its position. Its negotiating partners told Tehran that they could accept a continuation of enrichment for a limited time until a time, place and topics for formal negotiations could be agreed upon.

But the concession failed after Iran insisted it be allowed to enrich as part of its rights under the Nuclear Nonproliferation Treaty. The decision to end America's absence at the negotiating table and have a representative present at talks last year also went nowhere.

Uranium enrichment can be used to produce fuel for both nuclear energy or nuclear weapons. The U.S. and some of its allies accuse Tehran of seeking to build nuclear weapons. But Iran denies the charges, saying its nuclear program is geared toward generating electricity.

Ahmadinejad said "circumstances have changed" -- an apparent reference to Obama's election and Iran's own progress in its nuclear program since talks with the world powers last year.

Iran says it now controls the entire cycle for producing nuclear fuel -- from extracting uranium ore to enriching it and producing nuclear fuel. On Thursday, the country inaugurated a new nuclear facility producing uranium fuel pellets for a planned heavy-water nuclear reactor -- the final step in the sophisticated nuclear fuel cycle.

Ahmadinejad said Iran welcomes dialogue provided it is based on justice and respect, suggesting the West should not try to force it to halt enrichment.

"Today we are preparing a new package. Once it becomes ready, we will present that package (to you)," the president said. "It is a package that constitutes peace and justice throughout the globe and also respects other nations' rights." He did not give any indication as to what Iran would propose.

He was responding to the U.S., Britain, China, France, Germany and Russia whose representatives said last week that they will invite Iran for new talks over its nuclear program.

The U.S. and Iran broke off diplomatic ties after the 1979 Islamic Revolution and the takeover of the U.S. Embassy in Tehran by hard-line students. The relations became rockier under the Bush administration, which branded Iran as part of the "Axis of Evil" along with Saddam Hussein's Iraq and North Korea.

Ahmadinejad's popularity has declined in Iran over the past year, and his speech comes about two months before presidential elections in which he is seeking a second term in office.

Many Iranian's complain that Ahmadinejad has spent too much time on anti-Western rhetoric and not enough on fixing the country's economy, which is struggling with high unemployment and inflation.

As a result, Ahmadinejad may be trying to draw votes away from his opponents. The hard-line president's top competition in the June 12 vote is former prime minister Mir Hossein Mousavi, a reformist who favors better ties with the United States.

But it was unclear how far Iran is willing to go to build a new relationship with the U.S. Just last month, Iran's supreme leader -- who has the final say on all state matters -- abruptly dismissed Obama's offer for dialogue.

And in Ahmadinejad's speech Wednesday, he boasted that Iran was the one that forced Washington to retreat from its position.

"You know well that today you are suffering from weaknesses. You have no choice. You can't make any progress through bullying policies. I advise you to change and correct your tone and respect other nations' rights," he said.