A report on Iran's program, which the West fears is hiding a covert drive for the atom bomb, will now be sent to the UN body in New York, US ambassador Gregory Schulte told reporters in Vienna.

A top US official in Washington said the dossier would be brought up next week at the Security Council. "If Iran doesn't respond to words, we believe the world community should entertain the possibility of sanctions," Under-Secretary of State Nicholas Burns told a House of Representatives
committee. "But it's going to be incumbent upon our allies around the world to show that they are willing to act," he added.

ElBaradei hopeful of political settlement

In Vienna, the International Atomic Energy Agency wrapped up a three-day regular meeting that focused Wednesday on the Iranian standoff, with an assessment by IAEA director Mohamed ElBaradei.

He said it was still possible to reach a political settlement and urged all sides to "lower the rhetoric" to achieve this. "This is simply a new phase of diplomacy, an extension of diplomatic efforts to find a solution," ElBaradei said.

Unlike the IAEA, the Security Council has enforcement powers and can impose punitive measures, including sanctions. Europe and the United States have led the drive for action, saying Iran has hidden the truth about its nuclear program and should not be allowed to enrich uranium, which can provide the fuel for civilian reactors but also, in highly enriched form, the material for atomic weapons.

"Iran has not met the conditions at the IAEA" to suspend all enrichment and cooperate fully with inspectors, Burns said.

Iran threatens US with "harm and pain"

Russian Foreign Minister Sergei Lavrov, for his part, said in New York that there was no military solution to the row and cast doubt on the effectiveness of any sanctions against Tehran.

Moscow has been trying to broker a compromise under which Iran could enrich uranium in Russia, so that it gets the nuclear fuel but not the technology for making bombs. Iran has proposed suspending industrial-scale enrichment but doing research work, but the West says even small-scale enrichment is too dangerous.

Iranian security official Javad Vaidi, who led the Iranian delegation here, threatened reprisals against the United States. "The United States may have the power to cause harm and pain but it is also susceptible to harm and pain," he said. "So if the United States wishes to choose that path, let the ball roll."

Vaidi reiterated that Iran would press on with small-scale enrichment work despite the IAEA's calls to halt this activity."We will continue to exercise our R and D activities based on our right," Vaidi said, referring to research and development.

He said Iran would not -- for now -- use its key role as an oil supplier as a weapon in the international dispute over its nuclear program but may review the situation later. Iran is to continue its current level of cooperation with the IAEA, Iranian ambassador Ali-Agsar Soltanieh said.

"Lower the rhetoric"

Mark Malloch Brown, the incoming UN deputy secretary general, said Iran had been referred to the Security Council because its five permanent members -- Britain, China, France, Russia and the United States -- had to assume it was hiding something.

Speaking on BBC radio, he said it was still unclear what Iran's intentions were but "at this point, the permanent five have concluded that, because Iran has not been seen as coming clean on what it was doing, we have to assume the likelihood of a military program, and therefore must have Security Council action." He said any movement toward sanctions would be gradual but that if Tehran did not change tack, action could follow within months.

In Vienna, Schulte said ElBaradei's report "makes clear" that Tehran failed to meet IAEA demands in a February 4 resolution to suspend all enrichment and cooperate fully with agency inspectors. The IAEA reported Iran to the Security Council on that day but asked it to hold off on any action until ElBaradei had made an assessment report.

"Everybody is looking forward to a political settlement," ElBaradei said. "What we need at this stage is for people to lower the rhetoric, to see how we can go forward."

German Foreign Minister Frank-Walter Steinmeier on Wednesday said the international community remained "obliged" to find a "diplomatic solution" to the Iranian nuclear crisis.

"We are and will remain obliged to work towards a diplomatic solution and the referral to the UN Security Council does not spell an end to diplomacy, on the contrary," he said at a press conference in Berlin.