"I think it is getting more and more likely that this matter is going to have be referred to the Security Council," he told reporters accompanying him on a visit to Kuwait.
"Iran has made clear they do not intend to abide by their commitments" to reveal its nuclear activities, he said.
The United States has accused Iran of wantonly flouting international calls to curb its nuclear activities, saying Tehran is engaged in a "direct challenge" to the International Atomic Energy Agency (IAEA).
Powell described as a "troubling development" reports that Iran had removed the seals placed on centrifuges by the IAEA to ensure Tehran was not using its civilian nuclear program as a cover for weapons development.
The centrifuges are used to enrich uranium for use in nuclear power plants, but highly enriched uranium can also be used to make nuclear warheads.
"This can't be ignored any longer," Powell said.
"I hope this is a matter of concern for the IAEA," he said.
"It is our judgment that Iran is developing a nuclear weapon, has a nuclear weapons program," Powell added.
He made his remarks as officials from Britain, France, Germany and Iran met in Paris for talks on Tehran's nuclear program.
The meeting came amid increasing concern about Iran's intentions after diplomats in Vienna reported the Islamic republic was defying the international community by resuming the construction and assembly of nuclear centrifuges.
Under an agreement reached last year with Britain, France and Germany, Iran had agreed to suspend sensitive uranium enrichment, allow tougher inspections and file a comprehensive declaration of its nuclear activities.
French foreign ministry spokesman Herve Ladsous said the talks would bring together high-level officials and were aimed at establishing trust with respect to Iran's nuclear program.
The agreement was aimed at allaying international fears that Iran was secretly developing nuclear weapons, a charge Tehran denies.
But since then, experts from the UN's nuclear watchdog have found omissions in Iran's reporting, inspection visits have been delayed and the regime has backed away from a pledge to suspend all enrichment-related activities.
In Tehran, the deputy head of the Iranian parliament's foreign policy and security commission, Mohamoud Mohammadi, said the assembly would not ratify an additional security protocol to the nuclear Non-Proliferation Treaty (NPT).
Following pressure from the IAEA and the international community, Iran signed the protocol -- which would give IAEA inspectors increased powers -- in December last year, but has yet to ratify it.
Tehran says it is no longer bound to its deal with the European so-called "big three" because they sponsored a resolution adopted by the IAEA last month, which criticized Tehran for failing to cooperate.
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