The confidential International Atomic Agency (IAEA) report was released Monday ahead of a November 20 meeting of the body's board of governors, which is set rule on Iran's nuclear activities after a months-long standoff.
The IAEA said Iran had concealed aspects of its nuclear activities and breached a number of international monitoring agreements, including developing enriched uranium and plutonium -- material which can be used to make nuclear bombs.
But the report, made available to AFP, credited Iran for having since October "adopted a policy of full disclosure and decided to provide the agency with a full picture of all its nuclear activities."
At its meeting next week, the 35-nation IAEA board could declare Iran in non-compliance with the nuclear Non-Proliferation Treaty (NPT), a move which could lead to UN sanctions against the Islamic republic.
The United States accuses Iran, which is building a nuclear power plant at Bushehr with Russian help, of secretly trying to develop nuclear arms and wants the matter taken to the UN Security Council.
But a diplomat said that a number of IAEA board member states did not want to pursue such action.
Diplomats said Iran, which denies making atomic weapons and says its nuclear program is strictly peaceful, may escape a non-compliance ruling because it has yielded to key IAEA demands over the past month.
"The report is severe about the problems of the past but appreciative of Iran's cooperation since October 21," said one diplomat.
In September, the IAEA demanded that Iran fully disclose its nuclear program, agree to tougher inspections of suspect sites and suspend the enrichment of uranium.
Iran submitted on October 23 what it said was a full report on its nuclear program, only eight days before an October 31 deadline set by the IAEA for full disclosure.
And on Monday, Tehran's ambassador to the IAEA, Ali Akbar Salehi, handed over a letter to agency chief Mohamed ElBaradei pledging to sign an additional protocol to the NPT to allow wider inspections and told him that Iran was as of Tuesday suspending the enrichment program.
The IAEA report said Iran had "concealed many aspects of its nuclear activities with resulting breaches of its obligation to comply with the provision of the safeguards agreement" of the NPT.
But it said: "There is no evidence that the previously undeclared nuclear material and activities... were related to a nuclear weapons program."
However, the IAEA is still investigating the possibility that Iran is hiding an atomic weapons program, said the report.
"Iran has now acknowledged that it has been developing, for 18 years, a uranium centrifuge enrichment program and for 12 years, a laser enrichment program," the report said, referring to technologies that produce nuclear fuel for reactors but also material for making atomic weapons.
It said Iran made "limited quantities of nuclear material" that "dealt with the most sensitive aspects of the nuclear fuel cycle, including enrichment and reprocessing."
A diplomat said the report clearly implies that Iran is in non-compliance but said that the board could issue a condemnation without making a formal declaration that would throw the issue to the Security Council.
"There will surely be a severe judgement of Iran's lack of cooperation until October" but the accent after that will be on Iran's cooperation, especially since no sign of nuclear weapons have been found, the diplomat said.
Another diplomat said the IAEA's aim had been to get Iran to cooperate and since that was now happening "let's not potentially poison the well by going to the Council."