The State Department said Iran must answer questions about its program and accept a new IAEA protocol which would allow surprise inspections of its nuclear sites by the agency's October 31 deadline or face possible UN action.

"We think they should do that, obviously, in accordance with timetable of the most recent IAEA resolution, which is to do that by October 31," spokesman Richard Boucher told reporters.

"Failure to comply would obviously have to lead to referral to the United Nations," he said.

"It's time for Iran to answer the questions its been asked and comply with the obligations that ... many other countries have accepted," Boucher said.

He declined to say if Washington would call for the Security Council to impose sanctions against Iran, which it can do if it finds the country to be in violation of the nuclear Non-Proliferation Treaty (NPT), which is administered by the IAEA.

If Iran does not meet the October 31 deadline, the issue should be referred to the council "for whatever action the Security Council found appropriate," Boucher said.

"What the Security Council does about it is a matter for the Security Council," he said.

The United States has branded Iran part of an "axis of evil," and alleges that Tehran has used a nuclear plant near Tehran to test centrifuges used to make highly enriched uranium, which can be used to make atomic bombs.

Iran has denied the charges -- insisting that its program is purely for civilian energy purposes -- but has bristled at the IAEA demands for greater access to its sites.

Iran said earlier Monday that it would not accept any restrictions on its bid to generate nuclear power and rejected international demands for tougher safeguards.

"The Islamic Republic of Iran rejects any restrictions on the peaceful use of nuclear technology," government spokesman Abdollah Ramezanzadeh said.

"Up to now, we have cooperated with the IAEA beyond our commitments" under the NPT, he said, adding that future cooperation with the IAEA depended on "how our negotiations progress".

Iran's representative to the IAEA said meanwhile that traces of highly enriched uranium found by the UN body in August at the Kalaye Electric Company near Tehran came into the country on imported equipment.

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