Clearing the path for harsher sanctions, the UN nuclear watchdog agency on Thursday found Iran in violation of a Security Council ultimatum to freeze uranium enrichment and other demands meant to dispel fears that it wants to make an atomic bomb.
Besides concluding that Iran had expanded its enrichment activities instead of ceasing them, the International Atomic Energy Agency also reported that Teheran continued construction of a heavy water reactor and related facilities that - along with enrichment - could help it develop nuclear arms.
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The IAEA sent its report to the UN Security Council and its 35-nation board, saying Iran had ignored a council call for cooperation with the agency in its efforts to shed light on suspicious nuclear activities.
The conclusions - while widely expected - were important because they could serve as the trigger for the council to start deliberating on new sanctions to punish Teheran for its nuclear intransigence.
Teheran remained defiant.
"Iran has been under sanctions for the last 30 years," Ali Ashgar Soltanieh, Teheran's chief delegate to the IAEA, told The Associated Press, alluding to US trade embargoes and other punitive action since 1979, when the Islamic revolution toppled pro-Western ruler Shah Mohammad Reza Pahlavi. "The language of threat only creates more solidarity of the Iranian nation to protect their inalienable rights."
In Teheran, the deputy head of Iran's Atomic Energy Organization, Mohammed Saeedi, said demands that Iran suspend enrichment were against Teheran's "rights, the Nuclear Nonproliferation Treaty and international regulations."
At the United Nations in New York, Russia's UN Ambassador Vitaly Churkin said he had "no substantive comment" on the report, but reiterated Moscow's desire for a diplomatic solution.
"We should not lose sight of the goal - and the goal is not to have a resolution or to impose sanctions," he said. "The goal is to accomplish a political outcome."
US Deputy Ambassador Jackie Sanders said, however, that the Security Council needed to "ratchet up the pressure, and Iran needs to see an international community that stays coordinated and showing common purpose to have them stop what they're doing in developing nuclear weapons."
France's UN Ambassador Jean-Marc de La Sabliere also suggested new sanctions may be needed, saying the IAEA report would help convince Security council members that "a second resolution is necessary."
British Foreign Minister Margaret Beckett said her country would consult with other Security Council members on next steps. "We remain determined to prevent Iran acquiring the means to develop nuclear weapons," she said.
UN Secretary-General Ban Ki-moon said he was "deeply concerned ... that the Iranian government did not meet the (Wednesday) deadline set by the Security Council."
"I urge again that the Iranian government should fully comply with the Security Council" as soon as possible, he told reporters in Vienna, Austria, saying Iran's nuclear activities had "great implications for peace and security, as well as nonproliferation of weapons of mass destruction."
In making the three demands on Dec. 23 - an enrichment freeze; a stop to building heavy water facilities, and full cooperation with the agency - the council gave Iran 60 days to comply, a deadline that expired Wednesday.
But the agency, in a report prepared by IAEA chief Mohamed ElBaradei, found that "Iran has not suspended its enrichment-related activities."
Instead, the report detailed recent developments showing Teheran expanding its enrichment efforts - setting up nearly 1,000 uranium-spinning centrifuges in and above an underground bunker and bringing nearly 9 tons of the gaseous feedstock into the facility at Natanz in preparation for enrichment. It said Iranian officials had informed the UN agency that they would expand centrifuge installations to have close to 3,000 ready by May.
Iran's ultimate stated goal is running 54,000 centrifuges at the Natanz facility to churn out enriched uranium - enough for dozens of nuclear weapons a year, should Teheran choose to go that route.
Iran denies such plans, and says it wants to develop an enrichment program to generate power. It says its heavy water facilities at the central Iranian city of Arak - which will produce plutonium, another potential pathway to nuclear arms - were meant only to generate isotopes for medical research and other peaceful purposes.
The IAEA report noted Iran's continued building of both the Arak reactor and heavy water production plant - in defiance of the Security Council.
The six-page report also said that a lack of Iranian cooperation meant agency experts remain unable to progress with efforts "to verify fully the past development of Iran's nuclear program."
That also put Teheran in violation of the Security Council, which on Dec. 23 told Teheran to "provide such access and cooperation as the agency requests to be able to verify ... all outstanding issues" within 60 days.
The information contained in the report was based on material available to IAEA inspectors as of Saturday. But a senior UN official familiar with Iran's nuclear file - who demanded anonymity because he was not authorized to speak on the issue - suggested the agency's conclusions remained valid Thursday.
The agency began investigating Iran's nuclear activities more than four years ago, after revelations of nearly 20 years of secret work that included plans to enrich uranium. Since then, IAEA experts have found worrying evidence including experiments with plutonium, unexplained traces of enriched uranium and a 15-page document showing how to mold uranium into the shape of nuclear warheads.
Thursday's report said the agency continued to make no progress in clearing up these and other issues.
With the United States beefing up naval forces in the Gulf and cracking down on Iranians within Iraq it says are helping Shiite militias, concerns have grown that Washington might be planning military action.
In London, British Prime Minister Tony Blair said "the only sensible way" to solve the Iranian nuclear crisis was to pursue political solutions, but that he could not "predict every set of circumstances."
Still, "I know of nobody in Washington that is planning military action on Iran," Blair told British Broadcasting Corp. radio.