MADRID: Iran warned on Wednesday of a fierce response and radically higher oil prices if the country was attacked, but also signalled possible progress in its five-year nuclear standoff with the West.

"Iran, if there were any kind of activity of any sort, is not going to be quiet and would react fiercely," Iranian Oil Minister Gholam Hossein Nozari said here when asked what Tehran would do in the event of an attack.

He added that oil prices, which have been driven to record levels partly because of fear about the loss of Iran's 4.0-million-barrel-a-day output, would rise radically if Israel or the United States launched a military strike.

His comments on the sidelines of an oil conference here came as Foreign Minister Manouchehr Mottaki raised hopes of arriving at a negotiated "multi-faceted solution" to the nuclear stalemate.