Iran fails to answer weapons questions: IAEA

"I think that this (IAEA) report demonstrates that whatever the Iranians may be doing to try to clean up some elements of the past, it is inadequate," U.S. Secretary of State Condoleezza Rice told reporters in Washington.

"So I think this is just good reason to move forward with the Security Council resolution (for more sanctions)," she said.

But Iran, the world's fourth largest crude oil producer, said the IAEA report had reaffirmed its program was for peaceful purposes.

"I congratulate the Iranian nation for this success and victory which was a result of their resistance on (the country's) nuclear rights," chief nuclear negotiator Saeed Jalili said. "From our viewpoint this issue has ended."

Iran says it aims to refine uranium only to the low level needed for power plant fuel so it can export more oil wealth.

The IAEA said Iran had given its officials a long-sought look at work to launch a more durable centrifuge meant to overcome technical glitches hindering uranium enrichment.

It said Iran was testing "IR-2" centrifuges, an upgrade of a design obtained from Pakistani-led nuclear smugglers, in the pilot wing of its Natanz nuclear complex. IR-2s can enrich two or three times faster than P-1s.

(additional reporting by Francois Murphy in Paris, Louis Charbonneau at United Nations, Parisa Hafezi and Zahra Hosseinian in Tehran, Matt Spetalnick in Washington)

(Editing by Ralph Gowling)