The State Department is calling an Iranian decision not to provide visas to a U.S. women's badminton team an unfortunate situation that does not bode well for further people-to-people exchanges between the two countries.  The development came amid an Obama administration review of U.S. Iran policy.

Officials here say the paperwork for the U.S. team's visit to Iran had been submitted on time, and the Iranian government's failure to issue visas for the American athletes and coaches is a setback for efforts to advance non-governmental U.S.-Iranian contacts.

The State Department said Monday the 12-member U.S. delegation was en route to Tehran at the invitation of the Iranian Badminton Federation to take part in an annual international competition.

The team had been scheduled to travel to Iran from Dubai, but is now returning home after the Iranian Foreign Ministry said the team could not participate because of a lack to time to process the visas.

Despite the absence of diplomatic relations between the two countries there have been several sports and cultural exchanges in recent years.

The badminton visit had attracted heavy attention because it was to have been the first under the Obama administration, which is reviewing U.S. policy toward Iran.

At a news briefing, State Department Acting Spokesman Robert Wood said it is hard to say what prompted Iranian authorities to renege on admitting the Americans, but that it is a very unfortunate situation amid hopes the troubled bilateral relationship can improve.

"It is not a good sign," he said. "As the Secretary [Clinton] and others have said, when the Iranians unclench that fist, there will be a hand waiting to greet them.  And so it is unfortunate.  The Iranians are the only ones who can give you the explanation.  As I said, all the paperwork, all the required paperwork was submitted in time."

Wood said he expected a planned reciprocal visit to the United States by an Iranian badminton team in July to go forward.

A senior official who spoke here said there are no plans to suspend the broader Iran exchange program, begun by the Bush administration, but that the issue of the badminton team visit is obviously a concern that will be factored into future decision-making.

The sports development came as diplomats of the five permanent U.N. Security Council member countries and Germany - the P5+1- met in the German city of Weisbaden to review efforts to persuade Iran to halt a uranium-enrichment program that U.S. and European officials believe is weapons-related.

Spokesman Wood said the five-hour meeting was positive and thorough and that the six powers reaffirmed their commitment to a two-track strategy of incentives for Iran to stop the program and sanctions and other penalties if it does not.

Under-Secretary of State for Political Affairs William Burns, who represented the United States in Weisbaden, is returning to brief President Obama and Secretary of State Clinton on the meeting.  Wood said the six powers will not convene again until the U.S. Iran policy review is completed.