The International Atomic Energy Agency's knowledge of Iran's current nuclear program is "diminishing," the agency's director general reported Thursday, because Iran suspended cooperation in key areas in early 2006 and has not restored it.
The IAEA "is not in a position to provide credible assurances about the absence of undeclared nuclear material and activities," the agency said in a report issued to its 35 board members in Vienna, Austria.
The report confirmed that Tehran has continued to defy the U.N. Security Council by ignoring its repeated demands to freeze uranium enrichment, a potential pathway to nuclear arms.
The report is unlikely to satisfy the United States and its allies, who have said they will press for new Security Council sanctions unless Iran suspends enrichment and provides a full and detailed disclosure of past suspicious nuclear activities.
Greg Schulte, U.S. ambassador to the IAEA in Vienna, said in a statement that Iran had failed the test of full disclosure.
"Today's report by the Director General shows that Iran's cooperation with the IAEA remains selective and incomplete," Schulte wrote. "Iran has not met the worlds expectation of full disclosure.
"Under international pressure, Iran has finally shed more light on the history of its program. However, Iran still refuses to fully disclose the past and present as the IAEA expects and to suspend fully its proliferation-sensitive activities as the Security Council requires."
Britain's Foreign Office said shortly after the report was issued that it would pursue further sanctions from the Security Council and the European Union.
"If Iran wants to restore trust in its program, it must come clean on all outstanding issues without delay," the foreign office said in a statement. It said Tehran must restore broader and stronger inspection rights to IAEA teams and mothball its enrichment activities to avoid such penalties.
IAEA chief Mohamed ElBaradei said his agency will continue in the next few weeks to study a number of particular areas that indicate Tehran's nuclear program "could have military applications."
These include Iran's experiments with high explosive testing and the design of a missile re-entry vehicle, and the appearance of traces of highly enriched uranium on equipment purchased by the former head of Iran's Physics Research Center.
Although Iran appears to have provided a wealth of old documents, new written statements and interviewees to respond to a number of the IAEA's longstanding questions about Iran's nuclear program, which dates back to 1972, the IAEA report also laments that Tehran's cooperation "has been reactive rather than proactive," and that the country "needs to continue to build confidence" in light of its "undeclared activities for almost two decades."
The report found that Iran continues to defy Security Council resolutions demanding Tehran halt its uranium enrichment work, saying Iran has finished installing 18 164-machine centrifuge "cascades," and has fed hexafluoride gas into all 18 cascades.
But Iranian top nuclear negotiator said the IAEA report proves accusations Iran is pursuing nuclear weapons are baseless and that new sanctions against the country would be wrong.
Saeed Jalili said Tehran has answered all the questions by the IAEA and made "good progress" in cooperating with it.
In light of the report, "many accusations are now baseless," Jalili said, referring to U.S. claims that Tehran is pursuing nuclear weapons. "Those powers who base their accusations on this, I hope will reconsider what they say," Jalili said.
European governments responded to the ElBaradei report by saying that the "work plan" under which Iran is responding to the IAEA queries is "making headway," even if it is proceeding "slower than hoped."
The allied plan at this point is to see if the work plan continues to show progress, but if it does not, a new U.N. Security Council resolution imposing sanctions against Iran is expected to be introduced before January. The allies are looking ahead to Iran's elections in February, hoping that the adverse impact of sanctions will affect the fortunes of Iran's hard-liners in the balloting.
Last month the European Union ruled out imposing sanctions equivalent to those imposed unilaterally by the U.S. in October, which saw the Departments of State and Treasury designate the Iranian Revolutionary Guard Corps and its intelligence unit, the Quds Force, as terrorist organizations.
Despite the well known opposition of the Russians and Chinese to harsher U.N. sanctions against Iran, sources said Russian President Vladimir Putin, in his recent visit to Tehran, used "extremely harsh language" in his personal meeting with Iranian President Mahmoud Ahmadinejad, warning him that more sanctions will be forthcoming if Iran does not halt its enrichment of uranium.
The so-called "Putin proposal" for ending the standoff between Iran and the West over enrichment, never publicly defined or explained, was nothing more than a restatement of Russia's previous offer to Iran to conduct enrichment on foreign soil so Iran can enjoy the benefits of nuclear energy without suspicion that it is diverting nuclear fuel for military purposes.
Ahmadinejad rejected that proposal swiftly.
The Associated Press contributed to this report.
James Rosen joined Fox News Channel (FNC) in 1999. He currently serves as the chief Washington correspondent and hosts the online show "The Foxhole."