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The United Nations' atomic monitoring agency urged Iran Monday to allow continued inspections of its suspect facilities and to stop enriching nuclear fuel — a key step in making atomic arms.

In a statement endorsed by the United States and other agency members, the board of the International Atomic Energy Agency (search) said it expected Iran "to grant the agency all access deemed necessary by the agency" to defuse suspicions that Tehran was operating a clandestine nuclear weapons program.

The statement also "encouraged Iran ... not to introduce nuclear material" at its Natanz (search) enrichment plant pending the resolution of concerns about what it planned to do with any enriched fuel — normally a component of nuclear warheads.

The statement was a compromise designed to satisfy both Iran, which has denied that it was planning to make nuclear weapons, and the United States, which accuses Tehran of such activity.

"Iran should continue to be fully transparent," said Mohamed Elbaradei (search), head of the International Atomic Energy Agency, in announcing that the board had reached consensus on the statement after days of demanding negotiations. "We still have a lot of work to do."

Iran's delegate, Ali Akhbar Salehi, said his country was satisfied with the decision.

"We are happy," with the statement, he said. No United States comment was immediately available, but language in the statement expressing displeasure with Tehran's failure to come clean on nuclear activities was expected to please Washington.

The United States had demanded tough action to force Iran to open up details of its nuclear program, insisting that it submit to more intrusive inspections after what it called a "deeply troubling" report from the U.N. nuclear agency.

The board shared concerns "at the number of Iran's past failures to report material, facilities and activities as required by its safeguards obligations," the statement said. "Noting the Iranian actions taken thus far to correct these failures, the board urged Iran promptly to rectify all safeguards problems ... and resolve questions that remain open."

The statement stopped short of demanding that Iran accept such inspections but urged the country to look "positively" at signing and ratifying a protocol in addition to its present commitments that would give the agency more inspection powers.

In Tehran, Iranian President Mohammad Khatami (search) said Wednesday that his country was not trying to build nuclear weapons. He repeated that Iran was prepared to allow unfettered inspections by the nuclear watchdog agency but expected the international community to recognize Iran's right to acquire advanced peaceful nuclear technology.

Khatami spoke shortly before President Bush underlined Washington's concerns, saying he and other world leaders will not tolerate nuclear weapons in Iran. Bush also urged Tehran to treat protesters seeking the ouster of the Islamic government with "the utmost of respect."

The United States had wanted the nuclear agency to declare Iran in violation of the Nuclear Nonproliferation Treaty (search). The matter could then be sent to the U.N. Security Council for possible action.

The compromise language reflected the fact that the United States had met with difficulties in rounding up support for a tough resolution condemning Iran.

Nonaligned countries like Malaysia declined to support a tough line. Even strong U.S. allies are eager to avoid undermining Iranian reformers like Salehi rather than risk strengthening hard-liners.

Iran insists its nuclear program is intended to produce electricity, which will be needed as oil supplies decline. Tehran has said it would agree to provide more access and information to inspectors, but only in exchange for more advanced nuclear technology.

Khatami said Wednesday that America's open support for student-led protests in Iran was "incorrect" and only promoted national unity.

The comments were Khatami's first following a week of fierce clashes between pro-clergy hard-line militants and student-led protesters that left dozens injured and many more behind bars.