Prime Minister Hussein Moussavi of Iran denied that his country is producing outlawed chemical weapons, the official Iranian news agency said, contradicting an earlier report. The agency had quoted Moussavi as telling Parliament on Sunday that Iran was producing "sophisticated offensive chemical weapons." But after a Cabinet meeting, he was quoted as telling reporters: "The Islamic republic is capable of manufacturing chemical weapons and possesses the technology. But we will produce them only when Islam allows us and when we are compelled to do so." Iraq, Iran's enemy in the Persian Gulf War, has been accused several times of using chemical weapons.