By Mark Heinrich
VIENNA (Reuters) - The world's nuclear watchdog said in a report circulated on Friday that Iran has ignored a U.N. Security Council call to suspend all nuclear fuel enrichment and has accelerated the programme.
U.S. President George W. Bush said he wanted a peaceful solution to the crisis. His Iranian counterpart vowed earlier to ignore any U.N. resolution to curb Tehran's nuclear work.
Britain said it would ask the Security Council to increase pressure on Iran after the report by Mohamed
ElBaradei, chief of the International Atomic Energy Agency (IAEA).
The report, which diplomats passed to Reuters, was sent to the Security Council which could eventually impose sanctions on Iran. Tehran has said its enrichment policy is irreversible. It has vowed to withstand any consequences, whether financial penalties or military attack.
Iranian officials were not immediately available for comment.
However, hours before details of the IAEA report emerged, President Mahmoud Ahmadinejad said Iran would pay no heed to any U.N. measure designed to rein in its nuclear programme.
"Those who want to prevent Iranians from obtaining their right, should know that we do not give a damn about such resolutions," he told a rally in northwest Iran.
Bush emphasised his desire for a diplomatic way out.
Speaking after a meeting with Azeri President Ilham Aliyev, the U.S. leader said: "I assured the president of my desire to solve this problem diplomatically and peacefully."
The IAEA report confirmed that Iran had flouted the Security Council's demands.
"Iran was supposed to suspend, but since they continue to do experiments, they have not suspended enrichment efforts," said a senior official close to the IAEA.
The IAEA also said Iran had done little during a 30-day grace period to answer questions meant to determine whether its nuclear programme is purely civilian.
The report said IAEA tests confirmed Iran's claim this month to have enriched uranium with a cascade of 164 centrifuges to the low level needed to fuel nuclear power plants. It must be purified to a much higher level for bomb-making.
Iran was also building two new cascades of 164 centrifuges at its underground enrichment plant. IAEA inspectors were monitoring the construction.
Ahmadinejad said Iran was ready to defy its foes.
"Enemies think that by ... threatening us, launching psychological warfare or ... imposing embargos they can dissuade our nation from obtaining nuclear technology," he said.
"The Iranian nation insists on its right to peaceful nuclear technology. We will not back down one iota," he added.
British Foreign Secretary Jack Straw said the Security Council should now send a stronger signal to Tehran.
"We will now be asking the Security Council to increase the pressure on Iran so that the international community can be assured that its nuclear programme is not a threat to peace and security," he said in a statement.
This week Iran vowed to hit U.S. targets worldwide if attacked by Washington, which has not ruled out military options if diplomacy fails to halt what it says is Tehran's quest for nuclear weapons. Iran says its programme is purely civilian.
NO SURPRISES
Diplomats said questions persisted over Iranian research on advanced "P-2" centrifuges, documents on how to design an atomic bomb core, and intelligence reports of links between uranium ore processing, high-explosives tests and a missile warhead design.
Mark Fitzpatrick, nuclear analyst at the International Institute for Strategic Studies in London, said interest in ElBaradei's report focussed on how it assessed Iran's claims to rapid progress towards mastering the enrichment process.
"Answers to such questions will be important in helping the world understand the degree of urgency of the crisis and scope for diplomacy. If the IAEA cannot say much about Iran's progress, then policymakers will rely more on worst-case scenarios," Fitzpatrick told Reuters.
The United States, backed by Britain and France, favours limited sanctions if Iran refuses to shelve enrichment quickly.
Russia and China, the Security Council's other two veto-holding permanent members who want to protect lucrative stakes in Iran's energy sector, have so far opposed such moves.
"To be credible, the Security Council of course has to act. It cannot have its word and its will simply ignored by a (U.N.) member state," U.S. Secretary of State Condoleezza Rice said.
John Bolton, U.S. ambassador to the United Nations, said Washington and its allies want to shift the demands made in a March 29 council statement into a resolution under Chapter 7 of the U.N. Charter, which would be legally binding.
Chinese and U.S. diplomats said the United States was trying to arrange a meeting on Iran of foreign ministers of the five permanent council members and Germany in New York on May 9.
IAEA inspectors have found no hard proof that Iran has a military nuclear programme, but ElBaradei has said he still cannot say for sure that it is not conducting one in secret.
(Additional reporting by Parisa Hafezi in Tehran)
