VIENNA, 2 September 2005 — A report by the UN nuclear watchdog is expected to confirm Iran has resumed sensitive nuclear work, diplomats said, and EU officials meeting yesterday were ready to take steps leading to possible sanctions.

The International Atomic Energy Agency is expected to deliver its latest report on Iran’s nuclear program to 35 nations on the agency’s board of governors today or tomorrow, diplomats close to the agency said.

The IAEA has been investigating Iran’s nuclear program for almost three years. It has found no hard evidence to back US allegations that Tehran is developing nuclear weapons but is not convinced Iran’s atomic ambitions are peaceful.

The key element in the report from IAEA chief Mohamed ElBaradei will be confirmation that Iran has resumed work at a uranium processing plant at Isfahan, which Tehran mothballed under a November 2004 deal with France, Britain and Germany.

Iran insists its nuclear ambitions are entirely peaceful and has accused the EU of trying to deprive it of atomic energy.

“The report will not have a harsh tone, but it is expected to confirm that Iran ended part of the suspension,” a European diplomat told Reuters. “It will also outline a number of open questions about Iran’s nuclear program.” The report should say Iran’s explanation that Pakistani contamination was behind traces of enriched uranium found on Iranian machinery is plausible, but also that questions remain about advanced centrifuge research that could be related to weapons activities and other issues, diplomats told Reuters.

Foreign ministers from the 25 EU states agreed yesterday in Newport, Wales, that Iran should be referred to the UN Security Council if the IAEA finds Tehran’s nuclear activities are not wholly peaceful, Sweden’s foreign minister said.

“We agree that we must continue to state that if the IAEA is not satisfied with the result then it has to go to the Security Council,” said Sweden’s Laila Freivalds.

“But we don’t think now is the time to discuss sanctions,” she added.

In a letter before the meeting, British Foreign Secretary Jack Straw urged EU countries to build a united front against Iran’s decision to back out of a key part of the November 2004 Paris Agreement with the three biggest EU powers.

“We should take stock on Iran and discuss how we might best pursue the nuclear file over the coming weeks,” Straw wrote.

Separately, a group of Iranian exiles that has accurately reported about hidden nuclear sites in Iran in the past said Tehran acquired from China in 2004 a sizeable amount of a metal with many civilian uses but also useable in atomic weapons.