The United Nations nuclear watchdog has said Iran is continuing to defy its demands to stop enriching uranium and is instead stepping up its uranium enrichment programme.
The report by the International Atomic Energy Agency also said Tehran was blocking its efforts to probe suspicious nuclear activities.
Analysts say the report could pave the way to new sanctions against Tehran.
The UN Security Council imposed sanctions on Iran in March for failing to suspend uranium enrichment.
'Iran has not agreed to any of the required transparency measures, which are essential for the clarification of certain aspects of the scope and nature of its nuclear programme,' said a confidential International Atomic Energy Agency (IAEA) report obtained by Reuters news agency.
The report went on to say that Iran has not suspended its enrichment-related activities and has continued with the operation of its pilot fuel enrichment plant and with construction of its planned underground industrial enrichment plant.
The Bush Administration reacted to the IAEA assessment saying the report is 'a laundry list of Iran's continued defiance of the international community and shows that Iran's leaders are only furthering the isolation of the Iranian people'.
Major powers stand behind UN Security Council resolutions demanding Iran suspend all nuclear fuel work in exchange for negotiations on trade incentives, with the threat of escalating sanctions if Tehran keeps refusing.
French President Nicolas Sarkozy said Iran must decide if it wants to cooperate with the international community or face new sanctions.
The United States underlined impatience with Tehran by dispatching nine warships carrying 17,000 personnel into the Gulf in international waters off Iran's coast.
The US navy said the ships, including two aircraft carriers, would conduct exercises as part of a long-planned effort to reassure regional Arab allies of US commitment to Gulf security.
Naval officials described it as the largest daytime assembly of ships since the 2003 Iraq war.
