Iran rejects UN nuclear report

Iran's Supreme Leader Ayatollah Ali Khamenei dismissed the findings of a UN nuclear watchdog suggesting the Islamic Republic had either resumed or never stopped work on a nuclear weapon.

"The West's accusations are baseless, because our religious beliefs bar us from using such weapons we do not believe in atomic weapons and are not seeking that," he was quoted as saying on state television on Friday.

Iran has long held that its nuclear program was for civilian purposes only, but a reporton Thursday from the International Atomic Energy Agency cast doubts on those claims, in one of the most strongly worded rebukes of Iran's refusal to co-operate with nuclear inspectors assessing its nuclear program.

New IAEA head Yukiya Amano said in the report the information made available to the agency "raises concerns about the possible existence in Iran of past or current undisclosed activities related to the development of a nuclear payload for a missile."

France and Germany threatened fresh sanctions against Iran on Friday following news of the report.

The two European countries said they were considering expanding sanctions against Iran through the UN Security Council if Iran continues to ignore UN resolutions.

"Of course Iran has the right to use nuclear energy for civil purposes, but it has no right to create nuclear weapons," German Foreign Minister Guido Westerwelle told reporters in Berlin.

U.S. intelligence officials in 2007 had concluded that Iran appeared to have suspended work on nuclear weapons in 2003, but France, Germany, Israel and Britain disputed those conclusions, and the latest IAEA report appears tolend weight to those reservations.

U.S. officials said they will revisit their 2007 findings, but said it might also be possible that Iran resumed work on weapons technology sometime after their report.

Iran is already under three sets of UN sanctions for pursuing its nuclear program, which includes its work at a facility where uranium is enriched to higher levels of purity.

Iran announced last week that it had begun enriching its uranium stockpile to 20 per cent levels, raising the ire of the Western countries and Russia, who have tried to coerce Iran into complying with an International Atomic Energy Agency plan that would see Iran's uranium shipped abroad for enriching.

The United States and its allies have accused Iran of attempting to use its civilian nuclear program as a cover to build nuclear weapons, and made the offer to enrich uranium on Iran's behalf to give them the fuel they need for their reactors without allowing them to further enrich it into a material suitable for use in nuclear weapons.

Iran balked at the deal, instead suggesting it should be able to purchase fuel-grade uranium and maintain its own domestic enrichment program.