In a confidential new report, the International Atomic Energy Agency (IAEA) complained that Iran was continuing to defy UN demands to halt uranium enrichment.

Furthermore, it had started developing faster and more efficient centrifuges to produce enriched uranium, which can be used to make the fissile material for a bomb.

The IAEA has "recently received from Iran additional information," said the report, which will be put to its board of governors next month.

"As a result, the agency's knowledge about Iran's current declared nuclear programme has become clearer."

However, the information "has been provided on an ad hoc basis and not in a consistent and complete manner," the UN watchdog complained.

That meant that the agency "is not yet in a position to determine the full nature of Iran's nuclear programme."

Tehran insists its nuclear drive is purely peaceful, while Western countries, particularly the United States, accuse it of covertly seeking the bomb.

The IAEA said nearly all of the key outstanding issues agreed in the so-called "work plan" drawn up the IAEA and Tehran last autumn had been resolved.

Nevertheless, one crucial issue was still outstanding: Iran's alleged work in missile and explosives experiments which could point to a possible military dimension to its nuclear programme.

The IAEA recently received permission from key countries to confront Iran with intelligence documents regarding the experiments.

Tehran's response was to dismiss the allegations as "baseless", while offering no hard facts to disprove them, a senior IAEA official complained.

"The ball is in Iran's court," the official said.

The IAEA also complained that, in flagrant defiance of UN Security Council resolutions, Tehran had not suspended its uranium enrichment activities but had started development of new generation centrifuges.

An EU diplomat saw this as a provocation.

"Rather than choosing to build confidence, Iran has provocatively chosen to to develop advanced centrifuge technology," the diplomat said.

"It is of great concern that Iran has yet to address with any degree of seriousness the international community's concerns relating to military and weaponisation dimensions of its nuclear programme."

The US envoy to the IAEA, Gregory Schulte, agreed.

"Rather than complying with the UN and IAEA suspension requirements ... Iran is testing a new generation of uranium enrichment centrifuges, thereby deepening its violation of international obligations and broadening its defiance of the international concerns," Schulte said.

"After five years of evasion and after promising to cooperate fully with the IAEA 'work plan,' Iran's leaders have lost another opportunity to fully disclose their nuclear activities and to start to regain international confidence."

The IAEA report could be crucial for the UN Security Council in deciding whether to slap an additional third round of sanctions on the Islamic republic.

Security Council powers Britain and France on Thursday formally introduced an amended package of new sanctions in the hope of agreeing a new resolution next week.

In Washington, National Security spokeswoman Kate Starr said the United States was "disappointed" with Iran and would continue to push for more sanctions.

In Tehran, top nuclear negotiator Saeed Jalili said further sanctions would be a "disgrace", arguing that the report proved that accusations that it wanted nuclear weapons were baseless.

Iran's influential former nuclear negotiator Ali Larijani agreed.

"The UN Security Council should quash the past resolutions (against Tehran) and not look for more," Larijani said.

earlier related report
Stay out of nuclear crisis, Iran tells Security Council
A top Iranian cleric on Friday told the UN Security Council to stay out of the crisis over Tehran's contested nuclear drive, ahead of a key report by the UN atomic watchdog.

Ayatollah Mohammad Emami Kashani told worshippers at the weekly Muslim prayers that the Security Council -- which has already imposed two sets of sanctions against Iran -- was not competent to handle its nuclear file.

"The United States, Israel and Britain -- in other words Jewish Zionism and Christian Zionism -- are trying to resist in the face of Islam and (Iran's) Islamic system," he said in the sermon broadcast on state radio.

"They say we need to go to the Security Council, and to adopt a resolution against Iran.

But "the Council does not have the competence to examine a scientific dossier. The Council should examine security issues and the problems that you (the world powers) created yourselves."

The IAEA chief Mohamed ElBaradei was to release his latest report on the Iranian nuclear programme to the body's governing board in Vienna later on Friday, Iranian state media reported.

Iran's top nuclear negotiator Saeed Jalili has called a news conference for later Friday to respond to the report.

The contents of the report will be important on determining the future course of the nuclear standoff, with the United States leading Western calls for a further set of UN sanctions against Tehran.

Kashani repeated Iran's insistence that its nuclear programme is peaceful, saying it is "scientific and not a work of destruction to set the world on fire."

But Western powers fear Iran could use uranium enrichment technology, which can be used both to make nuclear fuel and the core of an atomic bomb, to make a nuclear weapon.

A defiant Iran has repeatedly refused to halt its enrichment of uranium.

Key European powers on Thursday formally introduced an amended package of new sanctions in the Security Council in the hope of agreeing a new resolution next week.

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