The resolution was tabled at the watchdog International Atomic Energy Agency (IAEA), whose 35-nation board of governors is expected at a meeting in Vienna on Thursday to send the Iranian issue before the Security Council, which has the power to impose sanctions.

The five permanent UN Security Council members (P-5) plus Germany had agreed in London on Tuesday to bring Iran before the Council over its disputed nuclear program, but, in a compromise with Iranian ally and trading partner Russia, put off UN action until at least the next IAEA meeting in March.

Moscow wants time to find a compromise solution.

The United States, which backed off from calling for immediate Council action in order to win a consensus from the P-5, stressed that it was seeking a diplomatic solution over an Iranian nuclear program Washington charges hides secret development of atomic weapons.

"The reason why we are reporting this to the Security Council is to move diplomacy to a new phase so that we can see if we can achieve a political settlement," UN ambasssador Gregory Schulte said.

Schulte said the draft "has the support not only of the European Union but also of the United States, also of Russia, also of China and also of a large number of other countries."

After over two years of failing to win support at the IAEA for referral to the UN, diplomats said the United States now has a majority for this move on the IAEA board.

The actual draft resolution, written by Britain, France and Germany, was edited Tuesday and Wednesday, with Russia insisting on deleting any reference to specific IAEA statutes that would authorize punitive measures by the United Nations, the diplomat said.

The draft asks IAEA director general Mohamed ElBaradei "to report to the Security Council of the United Nations" on steps Iran needs to take so that "outstanding questions can best be resolved and confidence built in the exclusively peaceful nature of Iran's program."

It also calls on ElBaradei to "report" on IAEA "reports and resolutions relating to this issue," documents which find Iran in non-compliance with the Non-Proliferation Treaty (NPT) for hiding nuclear work.

Western diplomats feel this finding, which the IAEA made in September but is not mentioned explicitly in the draft due to Russian objections, still provides grounds for the Security Council to eventually take action.

The draft also calls on Iran "to help the agency clarify possible activities which could have a military nuclear dimension."

The military reference is "new," one diplomat said, adding: "It's calling a spade a spade, and that's good."

The draft expresses "serious concern" that Iran has a document on making uranium hemispheres "since as reported by the (IAEA) Secretariat this process is related to the fabrication of nuclear weapons components."

The draft says it is "necessary" for Iran to "re-establish full and sustained suspension of all enrichment-related activities and reprocessing activities, including research and development."

Iran set off the current crisis when it broke IAEA seals on enrichment equipment on January 10. Uranium enrichment makes fuel for nuclear reactors but can also produce atomic bomb material.

The draft says Iran should "reconsider" its building of a heavy-water reactor, which would produce plutonium, another potential bomb component.

And the draft says Iran must cooperate fully with IAEA inspectors, including honoring the terms of an additional protocol for wider inspections and allowing visits and interviews outside NPT safeguards, which focus on nuclear material rather than weapons activities.

The resolution text calls on "Iran to understand" that there is "lack of confidence in its intentions in seeking to develop a fissile material production capability."

related report

Iran Poised To Retaliate Against UN Referral
Tehran (AFP) Feb 01 - Iran threatened Wednesday to retaliate if it is hauled before the UN Security Council over its disputed nuclear programme, by kick-starting sensitive fuel cycle work and blocking international inspections.

In a barrage of threats on the eve of a key meeting of the UN nuclear watchdog, firebrand President Mahmoud Ahmadinejad also vowed Iran would "continue on the road to victory" and labelled US President George W. Bush a warmonger.

Ahead of the meeting, world powers including Russia agreed on a draft resolution asking the International Atomic Energy Agency (IAEA) to report Iran to the Security Council, which has the power to impose sanctions.

"If Iran's case is referred or reported to the Security Council ... Iran's cooperation will decrease," Iran's top national security official Ali Larijani told a news conference.

"The government will be obliged to remove suspensions, which includes industrial-scale enrichment, and it will do so," he said, adding that a massive enrichment plant at Natanz in central Iran was "ready for operation".

"Inspections will be restricted," Larijani said of the now three-year-old IAEA investigation into Iran's nuclear activities.

Iran's ambassador to the IAEA, Ali-Aghar Soltanieh, said his country would go to full full industrial-level enrichment "and use 50,000 machines" if the referral went ahead.

Energy-rich Iran says it only wants to enrich uranium to make reactor fuel to generate electricity, but the process can be extended to make weapons-grade material.

Tehran prompted the latest crisis in the long-running standoff with the West by resuming enrichment research on January 10.

Its warnings came as world powers including Russia agreed on a draft IAEA resolution to be considered by the Vienna-based agency's 35-nation board on Thursday.

The five permanent Security Council members plus Germany agreed in London on Tuesday to bring Iran before the Council, but, in a compromise with Russia, put off UN action until at least the next IAEA meeting in March.

The draft resolution was edited Tuesday and Wednesday, with Russia insisting on deleting any reference to specific IAEA statutes that would authorize punitive measures by the United Nations, a diplomat in Vienna said.

British Foreign Secretary Jack Straw said Iran should "see this agreed position by the leaders of the international community not as a threat but as ... a final opportunity for Iran to put itself back on track".

The IAEA draft says it is "necessary" for Iran to "re-establish full and sustained suspension of all enrichment-related activities and reprocessing activities, including research and development."

Bush, in a telephone call to Russian President Vladimir Putin on Wednesday, renewed his support for a compromise proposal from Moscow, the White House said.

Under the plan, Russia would safeguard spent nuclear fuel in an effort to ensure that Iran does not develop atomic weapons.

Iran has blown hot and cold over the Russia proposal and insists it has the right to nuclear technology for peaceful purposes as a signatory to the Non-Proliferation Treaty.

Larijani said Iran "does not see any rationale to stop nuclear fuel research, even for one day".

"Those who possess stocks of nuclear arms meet together and take decisions and think that the Iranian people will submit to their decisions," Ahmadinejad fumed earlier in a speech in the south of the country.

He also lashed out at Bush, who in his State of the Union address Tuesday branded the Islamic republic "a nation now held hostage by a small clerical elite that is isolating and repressing its people".

"You who support the Zionist puppet regime, you who support the destruction of Palestinian homes, you have no right to talk about liberty or human rights," shouted Ahmadinejad.

"God willing, in the near future we will judge you in a people's tribunal," he said of Bush.

Larijani also appeared to be bracing for an escalation of the crisis, saying Iran was no longer even insisting on having more time for negotiation "because we have prepared ourselves for another scenario".

He said his talks Wednesday with Russian and Chinese deputy foreign ministers also failed to bear fruit: "They had a point of view on solving the issue, but we had a different point of view."

Russia told Iran it must cooperate with the IAEA in order to alleviate international suspicions about its nuclear program, the Russian state news agency RIA Novosti reported.

"Our friendly advice to our Iranian colleagues remains the same -- cooperation with the IAEA on the basis of the board of directors' resolution," Russian Deputy Foreign Minister Sergei Kislyak said after meeting Larijani.

Iran claims it is cooperating fully with an IAEA investigation, although the latest IAEA report shows Tehran refusing to give agency inspectors all the information or interviews they want.

related report

Sanctions Against Iran Would Backfire -- Russian Envoy
United Nations (AFP) Feb 01 - Russia's UN envoy on Wednesday warned that slapping sanctions on oil-rich Iran over its controversial nuclear program would backfire on the world community as Tehran could retaliate by halting oil and gas exports.

"If you impose sanctions theoretically on Iran, then it would be appropriate to ask a question: Who is imposing sanctions on whom: the international community on Iran or rather Iran on the international community?" ambassador Andrei Denisov told reporters here.

"Iran is one of the major suppliers of oil and gas. So it will be a very strong blow on the international energy market. That is one clear consequence of imposing sanctions," the Russia ambassador said.

He stressed that ongoing diplomatic efforts aimed "to try to solve the question without imposing sanctions."

Oil traders also fear that Iran may use its energy weapon against the industrialised world in the face of possible sanctions.

But Iran, the second-biggest producer in the Organisation of the Petroleum Exporting Countries, insisted Tuesday it saw "no reason" to stop oil exports as it faced the threat of being hauled before the UN Security Council over its nuclear ambitions.

The five permanent Security Council members -- Britain, China, France, Russia and the United States -- plus Germany agreed in London Tuesday to bring Iran before the Council, but, in a compromise with Russia, put off UN action until at least the next IAEA meeting in March.

A resolution was submitted at the watchdog International Atomic Energy Agency (IAEA), whose 35-nation board of governors is expected at a meeting in Vienna on Thursday to send the Iranian issue before the Security Council, which has the power to impose sanctions.

Iran insists that its nuclear program is a peaceful effort to generate electricity, but Europe, the United States and Israel fear it may be a cover for developing nuclear weapons.

Moscow wants time to find a compromise solution.

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