The U.S. envoy to the International Atomic Energy Agency (IAEA) is raising concerns about Iran's possible modification of missiles for nuclear use.

Gregory Schulte says the IAEA has information suggesting that Iran has held workshops associated with modifying its medium-range Shahab-3 missile to carry a nuclear warhead.  His comments follow a report by the U.N. nuclear watch group Monday on Iran's disputed nuclear program.

The Associated Press quotes Iran's envoy to the IAEA who dismissed the information as fabricated.

France Tuesday joined the United States in raising the possibility of new sanctions against Tehran in the wake of the report.

But China said today increased U.N. sanctions against Iran will not resolve the stalemate regarding the country's nuclear program.  Beijing said dialogue between the IAEA and Iran would be a better way to resolve the issue.

The U.S. State Department said today it expects to host a meeting with representatives of France, Britain, China, Russia and Germany Friday on how best to proceed.

In related news, the head of Iran's chamber of commerce told a reformist Iranian newspaper that U.N. sanctions already placed on Tehran have caused the costs of Iranian imports and exports to rise.  The Sarmayeh newspaper quotes Mohammad Nahavandian as saying the higher costs affect not only Iran's economy, but also mean lost opportunities for its trade and economic partners.

Nahavandian says the average price of imported goods has risen by about 48 percent.  He says the increased costs have amounted to several billion dollars that could be used to create one million jobs for Iranian youth.

In its new report, the IAEA says Iran continues to enrich uranium.  U.N. officials say Iran has amassed one-third of the enriched uranium it would need to make a nuclear weapon and could obtain the rest within two years.

Iran says its nuclear program is peaceful.  It says allegations of nuclear weapons research are false.

The IAEA's 35-nation board is due to discuss the report next week.

Some information for this report was provided by AFP and Reuters.