The United Nations' nuclear watchdog has warned Iran to suspend activities that could lead to an atomic weapon in a resolution adopted after three days of talks.
But the International Atomic Energy Agency stopped well short of reporting the regime to the UN Security Council, in a clear indication that the West wants to give diplomacy more time to ease the stand-off.
Iranian foreign ministry spokesman
The agency's 35-nation board of governors expressed "serious concern" yesterday over Tehran's decision to resume uranium conversion. It urged Iran to put its latest nuclear activities on hold to reassure the United States and others that it is not concealing a weapons programme.
But the implicit message to the Iranians was to give negotiations a chance to defuse the crisis.
IAEA chief Mohamed ElBaradei said he was "optimistic that we will continue on the path of dialogue".
Britain - which along with France and Germany has led a European effort to entice Tehran with economic and political incentives instead of threats - said it hoped "there is a non-confrontational way forward if Iran wants to take it".
Iran insists its nuclear programme is peaceful and geared only toward generating electricity. Sirus Nasseri, the country's chief delegate to the Vienna-based IAEA, defiantly declared that his country would be a "nuclear fuel producer and supplier within a decade" and dismissed the resolution as an attempt "to apply pressure".
"This resolution is political," said an Iranian foreign ministry spokesman, according to the state-run news agency. "It comes from American pressure. . . . It lacks any legal or logical basis and is unacceptable."
Diplomats said Tehran faced a September 3rd deadline to stop nuclear work or face another possible referral to the security council, which has the power to impose crippling sanctions.
In its resolution, the IAEA board gave director general Dr Mohamed ElBaradei a deadline of September 3rd to give it a comprehensive report on Iran's compliance or lack of it.
Iran had said it would rather endure sanctions than back down on a programme it says is a matter of national pride.