The chief U.N. nuclear inspector criticized talk of attacking Iran as "hype" on Monday, after France's foreign minister warned that the world should prepare for war if Iran obtains nuclear weapons.

"I would not talk about any use of force," said Mohamed ElBaradei, the head of the International Atomic Energy Agency.

ElBaradei, speaking outside a 144-nation meeting of his agency, urged both sides to back away from confrontation, in comments addressed both to Iran and the U.S.-led group of nations pressing for new U.N. sanctions for Iran's refusal to end uranium enrichment.

"We need to be cool," he said, adding: "We need not to hype the issue".

Negotiations and two sets of U.N. Security Council sanctions have failed to persuade Iran to stop its uranium enrichment program, a process that can produce fuel for nuclear power plants as well as material used in atomic weapons.

Iran insists its atomic activities are aimed only at producing energy, but the U.S., its European allies and other world powers suspect Iranian authorities of seeking nuclear weapons.

Foreign Minister Bernard Kouchner, speaking on RTL radio on Sunday, called for "more effective sanctions" against Iran if it continues to resist the demands to suspend uranium enrichment.

"We will not accept that such a bomb is made. We must prepare ourselves for the worst," he said, specifying that could mean a war. He did not elaborate on what kind of preparations that would entail.

"We have decided, while negotiations are under way ... to prepare for eventual sanctions outside the United Nations, which would be European sanctions," he said.

Kouchner was not specific about what penalties Europe might impose, other than to say they could be "economic sanctions regarding financial movements."

"Our German friends proposed this. We discussed it a few days ago," he said.

Sarkozy reportedly floated the possibility of European sanctions against Iran this summer. In a major foreign policy speech last month, he mentioned the possibility of an attack on Iran, which he said would be as "catastrophic" as Tehran getting a nuclear bomb.

In Washington, Defense Secretary Robert Gates said the Bush administration is committed, for now, to using diplomatic and economic means to counter the potential nuclear threat from Iran.

"I think that the administration believes at this point that continuing to try and deal with the Iranian threat, the Iranian challenge, through diplomatic and economic means is by far the preferable approach. That's the one we are using," the Pentagon chief said.

Meanwhile, Iran's foreign minister was quoted as saying on state television that enriched uranium fuel is ready to be shipped from Russia to Iran's first nuclear power plant.

The project has been beset by repeated delays due to payment problems on the Iranian side, according to the Russians. Iran, however, maintains it is because Moscow has been caving into Western pressure to halt the project.

Sunday's announcement comes after talks in Moscow between Iranian Foreign Minister Manouchehr Mottaki and Russian nuclear chief Sergei Kiriyenko to address delays in completing the $1 billion Bushehr power plant.

Iran currently has the ability to enrich small amounts of uranium for nuclear fuel but still nowhere near enough to power a nuclear plant, much less create a weapon. Russian officials say the Bushehr plant cannot open until six months after the current fuel is delivered.