The dispute comes as the International Atomic Energy Agency (IAEA) is set to meet next week to consider the report on Iran's nuclear program and decide whether Tehran is in compliance with the safeguards agreeement of the nuclear Non-Proliferation Treaty (NPT).

The IAEA's board of governors could decide at its November 20 meeting whether to send Iran's case to UN Security Council, which could in turn impose punishing sanctions on the Islamic republic.

"We stand by the report," IAEA spokesman Mark Gwozdecky told AFP about the 29-page-document that the agency's director-general Mohamed ElBaradei delivered to the 35-nation board of governors Monday.

Gwozdecky refused to comment further, saying the report was "a classified document and will be considered at next week's board meeting."

The report accused Iran of covert nuclear activities over the past 20 years, including making plutonium and enriching uranium, but said there is as yet no evidence it is trying to build an atomic bomb, according to a copy obtained by AFP.

The report was the fruit of eight months of IAEA investigations, including dozens of trips by inspectors to Iran and intensive laboratory analyses of samples taken, since ElBaradei visited Iran to check out reports of undeclared nuclear facilities.

The United States wants Iran to be cited for its past failures to report certain nuclear activities and for the issue to be sent to the Security Concil.

John Bolton, under secretary of state for arms control and international security, said in Washington that the IAEA conclusions flew in the face of established facts. He stopped short of directly criticizing ElBaradei.

"After extensive documentation of Iran's denials and deceptions over an 18-year period and a long litany of serious violations of Iran's commitments to the IAEA, the report nonetheless concluded that 'no evidence' had been found of an Iranian nuclear weapons program," he said.

"I must say that the report's assertion is simply impossible to believe," he said in a text released by the State Department Wednesday.

"The United States believes that the massive and covert Iranian effort to acquire sensitive nuclear capabilities make sense only as part of a nuclear weapons program," Bolton said.

The report said: "To date, there is no evidence that (the failures to comply cited)... were related to a nuclear weapons program. However, given Iran's past pattern of concealment, it will take some time before the agency is able to conclude that Iran's nuclear program is exclusively for peaceful purposes."

Iran's President Mohammad Khatami said Wednesday: "The important point was that there is no proof Iran is seeking to build the atomic bomb."

Bolton's comments are sure to intensify an emerging transatlantic row over how best to deal with Iran. The split became apparent Wednesday when Britain said the report should be dealt with calmly and diplomatically.

Britain, France and Germany have repeatedly urged dialogue with oil and gas-rich Iran. A visit by their foreign ministers to Tehran in October won key concessions over Iran's nuclear program, including an agreement to allow surprise inspections of suspect sites.

British Foreign Secretary Jack Straw said Wednesday that ElBaradei was "reporting a considerable degree of cooperation by the Iranians."

"I can't say whether this cooperation is complete but it has certainly been substantial," he said.

The diplomatic tug-of-war pits IAEA member states in favor of passing a non-compliance resolution with those advocating a lighter reprimand that would encourage Tehran to keep cooperating.

This puts the European countries on a collision course with the United States which is unwilling to accept anything less than taking non-compliance to the Security Council, a Western diplomat in Vienna said.

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