"Iran should stop enriching uranium and the international community should take a timeout from implementing sanctions," Mohamed ElBaradei, director general of the International Atomic Energy Agency (IAEA), said in Switzerland.

Speaking at the World Economic Forum in Davos, ElBaradei proposed a face-saving solution in which the two steps take place simultaneously instead of in sequence.

He added that an escalation of the crisis, and possible war, must be avoided, in comments reported to AFP at IAEA headquarters in Vienna.

"We need to reverse course because we are heading into a crash course," ElBaradei told reporters. "The idea that there's a military solution is absolutely bonkers."

The UN Security Council has imposed sanctions to get Iran to stop uranium enrichment, which makes fuel for civilian nuclear reactors but also the explosive core of atom bombs.

Iran says its nuclear program is a peaceful effort to generate electricity but the United States claims Tehran is hiding work on developing atomic weapons.

The Security Council has said that if Iran freezes enrichment, then sanctions could be lifted.

But Iran is planning to increase its enrichment capacity by installing 3,000 centrifuges, the machines which enrich uranium, at an underground facility in Natanz, where it is already running two pilot cascades of 164-centrifuges each at a pilot site above-ground.

ElBaradei is to report to the Security Council by February 21 on whether Iran has suspended enrichment.

If it has not, sanctions could be tightened and there is increased speculation that either the United States or Israel could eventually decide to bomb Iran in order to stop it from making nuclear weapons.

The United States kept up the pressure on Tehran on Friday, warning of "universal" opposition and more international pressure if it proceeds with plans to installing 3,000 centrifuges.

"This would be a major miscalculation and mistake by the Iranian government," US Undersecretary of State Nicholas Burns said Washington. "If Iran takes this step, it is going to confront universal international opposition.

"And if they think that they can get away with 3,000 centrifuges without another Security Council resolution and additional international pressure then they're very badly mistaken," Burns said.

ElBaradei has repeatedly said the crisis must be resolved through negotiation, with Iran guaranteeing that it is not an atom bomb threat and the West taking into consideration Tehran's legitimate security concerns.

ElBaradei said Friday: "There is no reason for Iran to feed nuclear material into enrichment cascades. They can take time out to build confidence.

"We have three to eight years (before Iran can build an atom bomb), which gives us a lot of time to reflect."

Iran's face-off with the IAEA went up a notch this week when the agency sharply answered Iran, asking it in a letter to reverse its ban on 38 IAEA inspectors from working in the country, a spokeswoman told AFP.

A diplomat said the IAEA was "pushing back" as "no country has ever de-designated so many inspectors in one go."

The strong IAEA response came even as Iran sent a letter of its own to the agency asking for the removal of the official overseeing the IAEA's inspection of the Iranian nuclear program, diplomats told AFP.

Iran had banned Christian Charlier, who is Belgian, last April from entering the country in retaliation for alleged leaks to the press.

Iran now wants Charlier no longer even to see reports on Iran at the agency's safeguards division, a diplomat said.

But IAEA officials told Iran that while it "has the right not to give visas, the IAEA decides what it does in Vienna," the diplomat said.

The United States on Friday called Tehran's attempt to get Charlier removed "outrageous."

State Department spokesman Sean McCormack called Iran's action "inspector shopping" and "indicative of their continued defiance."

"And this is not what the international system is looking for or, frankly, what it was hoping for in terms of Iranian behavior," he said.

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