The European Union (search) said Friday that Iran's nuclear program has cast a shadow over its relations with Europe, which has been at pains to forge closer trade and other ties in recent years.

"We want to send out a very strong signal that we mean business," said Dutch Foreign Minister Ben Bot (search), whose country holds the EU presidency. "We cannot accept ... the development of weapons grade uranium" by Iran.

He said a U.N. report this week shows Iran plans to process tons of raw uranium. Diplomats have told The Associated Press that Iran also is planning to restart some of its centrifuges.

This has strengthened suspicions in the international community that Iran is involved in activities that could be used to make nuclear warheads.

The ministers from the 25-nation bloc reassessed relations with Tehran. Bot said they took "a closer look at the way forward for our relations with Iran."

In recent years, the EU has pursued a "constructive engagement" policy toward Tehran designed to lead to a comprehensive free trade accord. In parallel, the EU has pursued dialogue on the status of human rights in Iran.

But Iran's failure to clear up questions over its nuclear program led the EU to suspend the trade talks in 2003.

British Foreign Secretary Jack Straw (search) said he was "perplexed and saddened that the Iranian government" was sticking to its nuclear ambitions.

Britain, Germany and France have pushed Tehran to abide by its nonproliferation commitments.

The International Atomic Energy Agency, a United Nations agency, said in a report obtained this week by The Associated Press that Iran plans to process more than 40 tons of uranium into uranium hexafluoride gas. Experts said the amount was enough for four or five warheads.

On Thursday, Iran acknowledged it plans to process tons of raw uranium, but said the IAEA was informed long ago. Iran maintains its nuclear program is geared only toward producing electricity, not a nuclear bomb.