Diplomats at the U.N. (search) nuclear watchdog agency were debating a draft resolution Thursday that expressed "serious concern" over Iran's resumption of uranium conversion but left open the possibility of more talks on the crisis.

The resolution, a copy of which was obtained by The Associated Press, said the agency cannot confirm that Tehran has declared all its nuclear materials and activities. But it did not mention reporting the regime to the U.N. Security Council (search), which has the power to impose crippling sanctions.

The text, which was to be reviewed later Thursday by the International Atomic Energy Agency's 35-nation board of governors, expressed "serious concern" over Iran's resumption of uranium conversion this week at its nuclear facility at Isfahan, saying the move "underlines the importance of rectifying the situation ... and of allowing for the possibility of further discussions in relation to that situation."

The measure requested IAEA chief Mohamed ElBaradei (search) to provide the board with a comprehensive report on Iran's compliance with an agency safeguards agreement by Sept. 3.