Iran defies deadline to halt atom work: U.N. watchdog

By Mark Heinrich

VIENNA (Reuters) - The U.N. nuclear watchdog declared on Thursday that Iran failed to meet a February 21 deadline to suspend uranium enrichment and Washington said major powers would meet next week to start writing a new Iran sanctions resolution.

By ignoring the deadline, Tehran reaffirmed its rejection of a mid-2006 offer by six world powers of talks on trade benefits provided it halted enrichment, a process that can yield nuclear power plant fuel or bombs.

The International Atomic Energy Agency said in a report Iran had installed two cascades, or networks, of 164 centrifuges in its underground Natanz enrichment plant with another two cascades close to completion.

That amounted to an effort to escalate research-level enrichment of nuclear fuel into "industrial scale" production.

"Iran has not suspended its enrichment-related activities," said the confidential IAEA report, obtained by Reuters.

The U.N. Security Council imposed sanctions on Iran in a December 23 resolution that banned transfers of atomic technology and know-how to Iran. The resolution authorizes the council to take further measures if Iran flouted the deadline.

Additional penalties might include a travel ban on senior Iranian officials and restrictions on non-nuclear business.

UnderSecretary of State Nicholas Burns said he would travel to London on Monday for a meeting of the permanent five members of the U.N. Security Council and Germany to begin what could be a lengthy process of drafting a second sanctions resolution on Iran.