Dutch Prime Minister Jan Peter Balkenende, whose country currently holds the European Union (EU)'s rotating presidency, underlined the warning after the weekend deal for Iran to suspend its nuclear uranium drive.

"The agreement reached with Tehran at the weekend is a step in the right direction," he told the European Parliament, giving a rundown on recent developments in key EU policy areas.

But he said that the International Atomic Energy Agency, the UN's nuclear watchdog, must be allowed to rapidly move ahead to verify Tehran's commitments under the deal.

"The IAEA has to be able to implement its measures as quickly as possible," he said. "If this does not happen we will have no option but to go to the UN Security Council."

In an 11th-hour deal Sunday with the EU's three biggest powers -- Britain, France and Germany (E3) --, Iran agreed to freeze uranium enrichment-related activities to ease fears such work could be diverted to make an atomic bomb.

The agreement was widely seen as averting the threat of Iran being hauled before the UN Security Council for possible sanctions later this month.

The EU has long pursued constructive engagement with Iran, seeking progress on the nuclear row in exchange for trade benefits, in contrast to the hardline US stance which sees Iran as part of its "axis of evil."

The US State Department said this week that the nuclear deal between Tehran and Europe is a step forward, but added that "it doesn't really make a difference until it's implemented and verified, and that's what counts."

The United States believes it could get support from the IAEA to refer Iran to the Security Council if it fails to comply with its IAEA obligations and commitments to European nations.

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