The UN nuclear watchdog said today Iran was expanding its uranium enrichment programme in defiance of international demands, opening the way to harsher sanctions against Tehran over fears it is seeking atom bombs.
The findings in a report by the International Atomic Energy Agency (IAEA) came on the day nine US warships sailed into the Gulf for manoeuvres to demonstrate American impatience with Tehran, which it also accuses of backing insurgents in Iraq.
Iran ignored another 60-day deadline for it to freeze enrichment activity set by the United Nations Security Council when it imposed a second round of sanctions on March 24th.
"Iran has not suspended its enrichment-related activities. Iran has continued with operation of its pilot fuel enrichment plant and with construction of its (planned industrial) enrichment plant," said the report.
In response, Iran said it remained committed to the nuclear Non-Proliferation Treaty (NPT), which the West suspects it is violating by using a declared civilian nuclear programme as a facade for mastering the means to build warheads.
"Iran is still loyal to its commitment in carrying out the NPT," Iranian state television quoted chief nuclear negotiator Ali Larijani as saying.
Iran, which had already said it was expanding uranium enrichment, says it seeks to use nuclear technology only for power generation. Enriched uranium can be used for nuclear power plants or, if refined to a much higher degree, for bombs.
Six world powers stand behind UN Security Council resolutions demanding Iran suspend all nuclear fuel work in exchange for negotiations on trade incentives, with the threat of escalating sanctions if Tehran keeps refusing.
In Washington, a White House spokesman said the new IAEA report was "a laundry list of Iran's continued defiance of the international community and shows that Iran's leaders are only furthering the isolation of the Iranian people".
US officials had said the powers would start drafting a third, harsher batch of sanctions if the deadline was flouted.
But a senior European diplomat at the Security Council said "I don't think we'll rush at it". He said he expected the Council to await the outcome of high-level exploratory talks on the nuclear issue between the EU and Iran next week.
Washington sent nine US warships into the Gulf, a narrow channel in international waters off Iran's coast and a crucial artery for global oil shipments. Oil rose towards $70 on world markets, partly on news of the force's arrival.
The US navy said the ships, including two aircraft carriers, would conduct exercises under a long-planned effort to reassure local Arab allies of US commitment to Gulf security.
In response, Iran said it would powerfully resist any threat from Washington. The US has said it is committed to a diplomatic solution but has not rule out military intervention.
However IAEA director Mohamed ElBaradei said last week the Western strategy of denying Iran enrichment capability was obsolete as Iran had already gained it.