The International Atomic Energy Agency (IAEA) director general said Iran is developing a nuclear fuel cycle mainly because it has been under international sanctions against its nuclear program which the United States charges is aimed at secretly developing atomic weapons.
"Have they taken the step from that into weaponisation? We have not seen that but I am not yet excluding that possibility," ElBaradei said in comments to a US congressional subcommittee.
ElBaradei told the subcommittee on Middle East and Central Asian affairs that "the jury is still out," on whether Iran possesses such a program.
"Our statements can make the difference between war and peace, that's why we have to be careful what we say," he said.
In a November report to the Vienna-based IAEA, ElBaradei had said there was no evidence that Iran had a nuclear weapons program.
But ElBaradei said last Sunday that the IAEA's discovery in January of designs for sophisticated P2 centrifuges in Iran for making highly enriched uranium (HEU) that could be used to make the bomb was "a setback, a great setback" since Iran claimed in October it had fully disclosed its nuclear activities.
This led to a tough resolution against Iran at an IAEA board of governors meeting last week in Vienna.
On Wednesday in Washington, the White House reaffirmed its "serious concerns" over Iran.
White House spokesman Scott McClellan said: "Our policy toward Iran is quite clear and has been quite clear. We continue to insist that Iran abide by all IAEA and NPT (nuclear Non-Proliferation Treaty) commitments."
Bush is due to welcome ElBaradei to the White House at 2000 GMT Wednesday to discuss IAEA inspections aimed at ensuring Tehran is not developing nuclear weapons.
Iran has said IAEA inspectors can return to the country on March 27, after originally postponing the mission last week in order to protest against the agency's tough resolution against the Islamic Republic.
Iranian President Mohammed Khatami reaffirmed Wednesday that Iran was willing to cooperate with the UN nuclear watchdog to close the file on the Islamic republic, but insisted on its rights to develop nuclear technology.
ElBaradei told the congressional subcommittee that the IAEA needs "much more intelligence" information from US agencies.
"We need images," he said, saying that the IAEA does not have enough money to buy satellite photographs.
The subcommittee's chair, Florida congresswoman Ileana Ros-Lehtinen, told reporters: "I think a lot of us believe that Iran's intentions" are not "peaceful and that they can hoodwink the inspectors."
She said she hoped ElBaradei "came away from this brief meeting understanding that a lot of us are very suspicious about Iran's true intentions and that not too many people believe they are for peaceful purposes."
"Iran has a history of underhanded dealings and we just want to make sure that we can do our part in putting the pressure on this agency (IAEA)," Ros-Lehtinen said.
She said this was necessary since the IAEA "comes from a position of incentives of good in order to have countries comply ... We don't want it to get too love-dovey."
"We want to make sure the inspectors are as tough as they can be. Iran is a devious place," the Republican lawmaker said.