The head of the International Atomic Energy Agency says he hopes the confrontation between Iran and the West over Iran's nuclear program can be resolved by more negotiations between Iran and the European Union. But, EU negotiators have begun drafting a resolution that would refer the case to the U.N. Security Council, where sanctions might be imposed.

IAEA chief Mohamed ElBaradei, speaking in Vienna as his agency's 35-member board of governors began discussing Iran's nuclear activities, appealed for a renewal of talks between the European Union and Iran before any submission of the issue to the Security Council.

"I think we, regrettably, we are going through a period of confrontation and political brinkmanship," he said. "I very much hope this week all the parties should work together to create the necessary conditions to go back to the negotiating table."

Despite strong opposition from Russia, China and several developing countries, EU diplomats say they are determined to draft a resolution that would refer Iran's resumption of nuclear conversion activities to the Security Council. But one diplomat monitoring the talks in Vienna says the European Union does not intend to seek immediate sanctions against Iran. Instead, he says, it would ask the Security Council to urge Iran to refreeze its nuclear program.

Iran has always insisted its nuclear program is for civilian purposes and that it has every right to pursue nuclear energy for such ends. But the United States and, increasingly, the European Union suspect Iran really wants to develop an atomic bomb.

Western countries say that, since Iran hid a uranium enrichment program from the IAEA for 18 years, the only way it can prove that it is not seeking nuclear weapons is to renounce sensitive nuclear technology altogether.

But Iran has vowed to press ahead with its program and claims that it is the victim of double standards.

The Eurasia editor of Jane's defense publications, Alex Vatanka, says the Iranians are confident they have the upper hand because, so far, they have not violated the Nuclear Non-Proliferation Treaty.

"The Iranians are very keen to point the finger at India and say, 'Look, India has not signed the NPT [Nuclear Non-proliferation Treaty] and America is delivering nuclear technology to India," he said. "We have signed the NPT and we cannot have these activities, which are allowed under the NPT, to carry on.' The point that they keep missing is that there is this political mistrust that they did hide for 18 years, that there is this suspicion that they are not telling the truth. And the issue here is, is Iran willing to pay the political price for it?

Gary Samore, a proliferation expert with the International Institute for Strategic Studies in London, says a nuclear-armed Iran would not only alter the balance of power in the Persian Gulf but could also spur some of Iran's neighbors to pursue nuclear weapons.

"If Iran develops nuclear weapons, that could put pressure on additional countries in the region, Arab countries, Turkey and so forth, to develop nuclear weapons, and the Middle East is already unstable enough without having a growth in the number of countries armed with nuclear weapons in the region," he said.

EU diplomats say they are hoping for a consensus on their draft resolution despite the initial opposition from many of the IAEA board members. They say they do not expect the IAEA board to vote on the matter until later this week.