British ambassador Peter Jenkins told reporters the European Union has "acceded to the request of several board members" of the UN watchdog International Atomic Energy Agency "who have asked for more time for diplomatic dialogue on the future of Iran's nuclear program."

The IAEA's board of governors was meeting in Vienna Thursday and expected to hold off on calling for Iran to be referred to the UN Security Council for possible sanctions for hiding sensitive nuclear activities in violation of the Non-Proliferation Treaty (NPT).

The board had in September found Iran in non-compliance with the NPT and was meeting to review progress on the dossier since then.

Jenkins, who was speaking for the EU presidency at the IAEA board meeting, said Iran should "seriously" consider a Russian compromise proposal that would allow it to enrich uranium in Russia.

But Jenkins warned Iran needs "to implement the confidence-building measures" for which the IAEA has called, namely to cease uranium conversion work that is the first step in enriching uranium into what can be nuclear reactor fuel or atom bomb material.

He said Iran should "refrain from any further unilateral move which could aggravate the situation," a clear reference to it moving on to actual uranium enrichment.

Jenkins said in a speech to the board "that any resumption of enrichment related activities at Natanz would seriously aggravate the situation created by the resumption of activity at Isfahan," the conversion facility.

Jenkins said in his press comments that Iran's failing to fully cooperate with an IAEA investigation of its past and current nuclear activities "undermines its claim that its nuclear program is peaceful in nature."

Jenkins said the EU also "sees grounds for deep concern" that Iran "has admitted to having in its possession a document which was supplied" by an international black market and which is a guide to making the explosive core of an atom bomb.

Jenkins said the opening for talks, and the IAEA's holding off on referral, should not be misunderstood by Iran.

"Iran should not conclude that this window of opportunity will remain open in all circumstances," Jenkins said.

He said Iran should return to negotiations "on a reasonable basis and in good faith."

EU-Iran talks collapsed last August when Iran broke a suspension of uranium conversion it had begun nine-months earlier in order to start the negotiations on guaranteeing it would not make nuclear weapons.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.