"We're going for referral this week," a Western diplomat said, confirming that the United States, as well as EU negotiating trio Britain, France and Germany, had lost patience with Iran.

The Security Council could use measures ranging up to trade sanctions to try to get Iran to stop nuclear fuel activities and to cooperate fully with an International Atomic Energy Agency (IAEA) investigation.

The emergence of the draft resolution ends weeks of speculation about how strongly the West would move to counter Iran after it resumed fuel work last month, claiming its nuclear program is peaceful and that it had the right to this technology under the nuclear Non-Proliferation Treaty (NPT).

The fuel work torpedoed talks with the three EU countries, known as the EU-3, which is aimed at obtaining guarantees from Iran that it is not secretly developing nuclear weapons, as the United States claims it is.

The EU-3 draft is to be given to other members of the IAEA's 35-nation board of governors for review and possible revision before being submitted for a consensus decision or vote.

IAEA chief Mohamed ElBaradei told reporters Monday: "Regrettably we are going through a period of confrontation and political brinkmanship."

He said he hoped negotiations could resume, but that in any case Iran must finally allow access to sensitive sites to help the IAEA conclude an investigation running since February 2003 into Tehran's nuclear activities.

The "ball is very much in Iran's court on this issue," said ElBaradei.

The Western powers will seek at the IAEA board meeting that began in Vienna Monday to win a consensus for the resolution, as this is how compliance issues are traditionally decided at the UN watchdog, said the Western diplomat, who asked not to be named.

But if a consensus were not reached by the end of the week, the European trio would call for a vote, the diplomat said, even though some countries have warned that such a move would be divisive.

Russia and China, two nuclear powers and key Security Council members, as well as non-aligned states on the IAEA board, are against taking Iran to the top UN body, fearing this would escalate the confrontation.

"The Iranians are convinced they are in a strong position" as the United States is bogged down militarily in Iraq and the Islamic Republic has clout as a crucial supplier to an already tight world oil market, a diplomat said.

A senior European diplomat said the European trio was "fed-up" after Iranian president Mahmoud Ahmadinejad insisted in a speech to the UN General Assembly on Saturday that Iran would not cease uranium conversion it had resumed in August.

Conversion is the first step in making enriched uranium, which can be used either to fuel power reactors or become the raw material of atom bombs.

"The speech was not a positive contribution," the diplomat said. "What else should we do?"

The IAEA had already in August called on Iran to cease the fuel work.

"The resolution also talks about resumption of negotiations (with the three European states) if conditions are restored," the diplomat said.

That was a reference to Iran halting conversion work, as it had done last November to start the talks with the European trio.

One of the diplomats said the West hoped that "Russia might come around" to supporting the resolution. He said said the resolution did not seek sanctions against Iran but was calling on the Security Council to use its power and influence to get Iran to honor the IAEA's call for a halt to nuclear fuel work and for more cooperation with its investigation into the nuclear program - a probe that has uncovered almost two decades of hidden atomic activities.

The EU draft resolution calls for Iran to be reported to the Security Council based on two clauses in the IAEA's founding statute.

The first says that, "if in connection with the activities of the agency there should arise questions that are within the competence of the Security Council, the agency shall notify the Security Council."

The other clause says the IAEA board shall report "non-compliance (with non-proliferation safeguards) to all members and to the Security Council and General Assembly of the United Nations."

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