A proposed resolution condemning Iran's past nuclear program warns that the U.N. atomic agency would use "all options at its disposal" if the country violates its nuclear obligations again, but makes no specific mention of Security Council (searchsanctions.

The decision not to mention the Security Council in the draft, agreed to by U.S. and European negotiators, was a key concession by the United States. Iranian officials had said they would have rejected any direct mention of Security Council action -- and the implicit threat of sanctions.

The draft broke days of deadlock at the International Atomic Energy Agency (search). It was formally submitted to the agency's board of governors, who are to resume a meeting on Wednesday, said diplomats who spoke on condition of anonymity.

"We've reached agreement," said one of the diplomats. "We're all set for Wednesday."

The diplomats told The Associated Press that the draft included a "trigger mechanism" demanded by the United States in the form of a clause indirectly threatening U.N. Security Council action should Iran be found guilty of "further significant failures" -- new evidence of clandestine activities or failure to honor its new commitments to the IAEA.

"Should any further serious Iranian failures come to light, the board of governors would meet immediately to consider in light of the circumstances and the advice of the (IAEA) director general, all options at its disposal, in accordance with the IAEA statute and Iran's safeguard agreement," the clause stated, as read to AP by a diplomat.

Last week, Washington had insisted it would hold out for at least a threat of Security Council action over 18 years of clandestine activities by Iran including uranium enrichment (searchand plutonium processing. U.S. officials say those activities point to a nuclear weapons agenda.

U.S. officials had hoped that Iran's past nuclear cover-ups would be enough for the U.N. Security Council to get involved. The council has the power to impose international sanctions.

France, Germany and Britain instead put forward a softer worded draft resolution meant to focus on encouraging Iran to open its nuclear programs to stringent IAEA scrutiny. That was rejected by Washington, leading to a days-long impasse.

As the text of the draft was still developing earlier Monday, Ali Akbar Salehi, Iran's chief IAEA envoy, suggested his country was happy with a resolution that avoided direct mention of Security Council involvement but refused to characterize developments as a "victory" over Washington.

"It's always natural that there are differences of views on matters of international importance," he told AP. "What is important here is that a chance has been given for the power of logic to prevail."

He said Iran would not have tolerated any direct mention of Security Council action in any resolution.

"Those are red lines that are not going to be crossed by anyone," he said, suggesting that Iran would have rethought its nuclear concessions, including opening its programs to intensive scrutiny and suspending uranium enrichment, had the resolution mentioned the Security Council.

A U.S. official who demanded anonymity said agreement was reached after days of negotiations between Washington, London, Berlin and Paris. U.S. Secretary of State Colin Powell talked with his British, German and French counterparts over modifications of the draft late into Monday.

The deep differences led to an unprecedented clash between chief U.S. delegate Kenneth Brill and IAEA Director General Mohamed ElBaradei on Friday, with Brill questioning ElBaradei's credibility and suggesting he played down evidence that Iran had tried to build nuclear weapons over the past 18 years.

The dispute focused on a report by ElBaradei stating there was as yet "no evidence" of an Iranian nuclear weapons program.