The European Union is waiting for a report from the International Atomic Energy Agency (IAEA) on Iran due early next month, diplomats said after British Foreign Secretary Jack Straw met IAEA chief Mohamed ElBaradei, along with his French and German counterparts and other EU leaders.

"Military action is not in contemplation here, full stop," said the official, commenting on what would happen if Iran reneges on a deal struck with Straw, Germany's Joschka Fischer and France's Dominique de Villepin.

The EU heavyweight trio clinched an agreement from the Islamic republic, 10 days before an IAEA deadline, that it would sign the additional protocol to the Non-Proliferation Treaty allowing snap inspections of its nuclear sites.

EU leaders warned at a summit earlier this month that the lucrative trade deal would be in jeopardy if Iran did not come clean on its nuclear drive.

WAR.WIRE