Diplomats on the 35-nation board of governors of the International Atomic Energy Agency are working behind closed doors to find agreement on a tough resolution, in an attempt to solve the Iran nuclear issue.

Britain, France and Germany have circulated a draft resolution urging Iran to provide immediate access to all facilities for inspection and to reconsider construction work on a heavy water reactor that could produce bomb-grade plutonium.

The draft regrets Iran's failure to suspend its uranium enrichment activities as agreed with the Europeans last year. Gary Samore, former U.S. official and head of the International Institute for Strategic Studies, says this is a major sticking point between the EU-three and Tehran.

"I think that one of the main issues is that Iran's commitment to suspend its enrichment program while the IAEA carries out its investigations has not been adhered to in a way that satisfies the Europeans that negotiated this agreement with Iran last fall and in particular the UK, France and Germany are very unhappy that Iran has continued to build centrifuge machines even while it claims it is honouring suspension of its enrichment program," he said.

The European draft resolution calls on Iran to suspend immediately all activities connected with reprocessing and uranium enrichment. The resolution does not go far enough for Washington, which believes uranium enrichment is a key part of Iran's bomb program.

The United States says the involvement of the Iranian military in building uranium enrichment centrifuges is not the sign of a peaceful program as claimed by Tehran.

The United States wants any resolution to include a late October deadline for Iran to comply and also calls on Iran to provide a complete list of nuclear technology it bought on the black market that includes the names of suppliers.

Seyed Hossein Mousavian, head of the Iranian delegation, told reporters Monday suspension of uranium enrichment cannot go on indefinitely.

"The suspension cannot continue for a long time because this is the legitimate right of Iran, nothing illegal and Iran has done all that has been requested to create confidence," he said. "Today the enrichment activities of Iran are completely under the supervision and control of the IAEA."

Mr. Mousavian was named last week by an Iranian exile opposition group as one of an inner circle in the government which has a special responsibility "to prevent the disclosure of the regime's nuclear activities from the international scene."

The IAEA is expected to adopt a compromise resolution on Iran later this week. Diplomats say it is not likely the resolution will mention referral to the United Nations Security Council, but this may come up at the next board meeting in November if Tehran fails to comply.