Iran still defiant over nuclear program, U.S. says

WASHINGTON (Reuters) - The United States Friday dismissed as limited and overdue Iranian steps to allow better monitoring of its nuclear program, saying Tehran was not fully cooperating and had not dispelled doubts about its activities.

The International Atomic Energy Agency's latest report on Iran said it had slowed its nuclear expansion and met some demands for better monitoring but allegations of covert atomic bomb research look credible and Tehran must address them.

Western powers suspect Iran's nuclear activities are aimed at developing a nuclear weapon but Iran says its program is to generate civil nuclear energy so that it can export more of its valuable oil and gas.

"It demonstrates that Iran continues to expand its nuclear program and continues to deny the IAEA full cooperation," a White House official said of the report by the U.N. atomic watchdog.

"There are still doubts about the peaceful intentions of its program," the official told Reuters. "Those overdue, limited steps fall short."

The report will form the basis for six-country talks on September 2 to look into harsher U.N. sanctions against the Islamic Republic over its uranium enrichment program.

New Iranian gestures of cooperation with IAEA inspectors could make it harder for the United States and big European allies to persuade Russia and China, major trade partners of Tehran, to agree on steps to squeeze its lifeblood oil sector.

(Reporting by Sue Pleming in Washington and Patricia Zengerle in Oak Bluffs, Massachusetts; Editing by John O'Callaghan)