"My sense is that there aren't high expectations" for the report which International Atomic Energy Agency (IAEA) head Mohamed ElBaradei is due to issue, according to Benjamin Chang, a spokesman for the US mission to the United Nations.

ElBaradei is to forward his report to the Vienna-based IAEA's 35-nation board of governors as well as to the 15-member Council here. He is also to discuss it with UN chief Ban Ki-moon who will be in Vienna Friday and Saturday.

The report was commissioned in a Security Council resolution adopted last December 23, which slapped nuclear and ballistic missile-related sanctions on Iran for continuing to enrich uranium and called for cuts in the IAEA aid to the Iranian nuclear program.

That resolution threatened unspecified "further measures" if Tehran did not comply by next Friday.

"It will be up to capitals to react initially (to the ElBaradei report)," said China's UN delegate Li Junhua.

Chang meanwhile said US efforts were currently focused on ensuring that the sanctions voted last December are fully implemented.

"US Treasury and other officials have been engaging with the Europeans to make sure that the measures already put in place by the Security Council are implemented and see what else there could be," he added.

Asked whether he felt the financial sanctions were beginning to have an effect, he said the Iranians were beginning to feel the pinch.

"Nobody likes to face UN-mandated sanctions," he said, adding that US officials were also asking their European colleagues: "Do you want to deal with rogue regimes?"

"Some (European nations) made the decision it's no and that is having an effect," Chang added.

"The Americans are beginning to realize that the (December) resolution had some effect on Iranian behavior," said another Western diplomat, who spoke on condition of anonymity.

"It's not that they (the Iranians) have bowed to our demand that they halt uranium enrichment and reprocessing, but they are more inclined to return to the negotiating table," he added.

"The resolution and the fact that the banking sector is beginning to be wary and say: what could be next ?... This is having an impact and it is important because today no one is dismissing a second resolution."

He also said that the fact that China and Russia signed on to the targeted UN sanctions last December meant that Tehran would not be able to drive a wedge between those two nations and the four Western powers -- the United States, Britain, France and Germany -- trying to rein in Iranian nuclear ambitions.

"Our approach is based on the idea that faced with such a choice, the Iranians will make the right decision. And to lead them in that direction, we need pressure, but gradual pressure with an exit strategy. This is why we are prepared to suspend the sanctions if they suspend uranium enrichment," the Western diplomat said.

"I don't know how long the negotiations (on new sanctions) will take nor tell you exactly what they will involve," he noted. "We could toughen the travel ban, broaden the lists and possibly include some economic sanctions, although I am not sure the Russians would accept them," he added.

The December resolution drew up a list of Iranian officials and entities involved in the nuclear and missile programs that were subject to an assets freeze and a travel ban.

The West, led by the United States, accuses Iran of seeking to acquire an atomic bomb through its nuclear program, which Tehran insists is solely for peaceful purposes.

Amid rising tensions between Washington and Tehran, ElBaradei has warned that a military attack on the Islamic republic would be counter-productive and would only encourage the country to work harder on its nuclear program.

Asked what Beijing's stance on additional sanctions would be, Li said: "It all depends on what is proposed."

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