The United Nations nuclear agency says Iran is enriching uranium - despite a U.N. deadline Thursday for Tehran to stop the sensitive nuclear work.
In a report to the Security Council, the International Atomic Energy Agency says it still has not been able to confirm Iran's claim that its nuclear program is for peaceful purposes. The report opens the way for the Council to impose sanctions on Iran for failing to abide by the deadline.
President Bush said today there must be consequences for what he called Iran's defiance. Speaking to a veterans' convention in the western state of Utah, Mr. Bush said Iran cannot be allowed to develop a nuclear weapon.
The French foreign minister, Philippe Douste-Blazy, said Iran's response has been unsatisfactory, but he said dialogue should remain a priority.
In Tehran, a senior Iranian official, deputy head of Iran's Atomic Energy Agency Mohammad Saeedi said the report shows that American claims about Iran's nuclear program are based on illusions.
Earlier Thursday, Iranian President Mahmoud Ahmadinejad said his nation will not back down in the face of intimidation and give up its right to nuclear technology.
European Union officials says EU foreign policy chief Javier Solana talked by telephone with Iranian nuclear negotiator Ali Larijani, and the two agreed to meet "soon."
U.S. Undersecretary of State Nicholas Burns will join counterparts from other major powers for talks about sanctions next week in Europe.
U.S. officials say they are confident that at least a first set of penalties against Iran will be approved within weeks.
The West accuses Iran of trying to develop nuclear weapons. Iran says its nuclear program is only for peaceful purposes.
Some information for this report was provided by AP, AFP and Reuters.