French Foreign Minister Jean-Yves Le Drian raised the possibility Wednesday of invoking the mechanism, but Iran's Foreign Ministry said this would not be permissible, AFP wrote.
The deal "does not allow the European parties to invoke the mechanism as Iran is exercising its legal right in response to the United States' illegal and unilateral actions", Foreign Ministry spokesman Seyyed Abbas Mousavi said.
The nuclear deal – known formally as the Joint Comprehensive Plan of Action or JCPOA – has been unraveling since May 2018 when US President Donald Trump unilaterally withdrew from it and began reimposing sanctions on Iran.
The three European countries still party to the deal – Britain, France and Germany – have been trying to salvage it. But their efforts have borne little fruit, and one year after the US pullout Iran began retaliating with a series of steps to row back its commitments to the accord.
On Wednesday, Le Drian said that "every two months there is another notch (from Iran) to the extent that we are wondering today... about the implementation of the dispute resolution mechanism in the treaty."
"Given the succession of actions taken by the Iranian authorities, who are progressively at odds with the contents of the JCPOA, the question comes up," he added in comments, to the National Assembly's foreign affairs committee.
Le Drian appeared pessimistic that France's efforts to save the agreement would succeed.
French President Emmanuel Macron has been trying to organize a meeting between Trump and Iranian President Hassan Rouhani, but so far without success.
"The efforts at de-escalation that we have attempted, that the president of the republic has attempted on several occasions, have not come to anything for a whole series of reasons," he said.
'Irresponsible and unconstructive'
Mousavi hit out at what he called the "irresponsible and unconstructive" remarks.
"It extremely discredits the effectiveness of political initiatives for the whole implementation of the JCPOA by all sides in line with the system of lifting sanctions," he said.
"The logic and the purpose of the mechanism for resolving anticipated issues in the JCPOA is to consider compensatory measures for both sides.
"Therefore... the JCPOA doesn't allow the European parties to invoke the mechanism against the Islamic Republic of Iran's legal right in response to the United States' illegal and unilateral actions," he added.
The JCPOA set out the terms under which Iran would restrict its nuclear program to civilian use in exchange for the lifting of Western sanctions.
Since the US pullout, Iran has taken four steps back from the accord.
The latest was on November 4 when its engineers began feeding uranium hexafluoride gas into mothballed enrichment centrifuges at the underground Fordo plant south of Tehran.
Soon afterward, Britain, France, Germany, and the European Union said Iran's decision to resume activities at Fordo was "inconsistent" with the nuclear deal.
Germany warned earlier this month that the dispute resolution mechanism in the agreement could be triggered if Iran continued down this path.
It covers various stages that could take several months to unfold, but the issue could eventually end up before the UN Security Council, which could decide to reimpose sanctions.
The five-nation commission overseeing the Iran nuclear deal is set to meet in Vienna on December 6, with fears growing that it could collapse.
The joint commission is made up of the three European nations and the deal's other remaining parties, China and Russia.