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VIENNA (Reuters) - The United States and European Union accused Iran of breaking nuclear transparency rules by escalating uranium enrichment without proper U.N. surveillance and said its "provocative" behavior invited tougher sanctions. They spoke at a tense meeting on Wednesday of governors of the United Nations nuclear agency, a day after the U.N. Security Council said it was ready to tackle Western powers' proposals for new sanctions on Iran, which China has so far resisted.
A diplomat in the closed-door, 35-nation International Atomic Energy Agency meeting said China's ambassador reiterated that more negotiations, not sanctions against its major trade partner, must be pursued.
IAEA director Yukiya Amano, in a February 18 report to the U.N. watchdog's governors, said for the first time that intelligence showed Iran may be trying to design a nuclear-armed missile now, instead of only in the past -- as Washington assessed in 2007.
U.S. and EU envoys told the meeting they shared his concern.
Amano also said Iran began higher-grade uranium enrichment on February 9 before his inspectors could get to the scene and beef up monitoring. Diplomats said Iran was refusing to allow more cameras and inspections at very short notice.
Iran's IAEA envoy Ali Asghar Soltanieh said Amano's report had "misled the public" and was "not balanced and factual." He said Tehran alerted inspectors by letter two days before the enrichment boost, in keeping with safeguards obligations.
Soltanieh implied that Iran could quit the Non-Proliferation Treaty (NPT) if it could no longer expect to be treated justly.
But to reporters later, Soltanieh reverted to Tehran's standard line: "I officially declare we will not withdraw from the NPT and we will not have nuclear weapons as an option."
An NPT pullout by Iran would mean the ejection of IAEA inspectors and could provoke Israeli or U.S. attack.
In a riposte to Soltanieh, Amano defended his impartiality by saying the intelligence derived from a variety of sources over a long period and been judged compelling by a team of nuclear experts, diplomats there said.
Amano said Iran "is a special case" because it had hidden earlier nuclear activity from IAEA scrutiny and was stonewalling inspectors seeking explanations of intelligence pointing to Iranian efforts to "weaponize" enrichment technology.
Top officials in Tehran have portrayed the Japanese IAEA chief, who succeeded Mohamed ElBaradei in December, as an inexperienced lackey of the pro-sanctions Western powers.
Spain's envoy to the IAEA, speaking as the EU's current president, noted Amano's complaint that Iran started refining uranium up to 20 percent last month without inspectors present.
This violated Article 45 of Iran's safeguards agreement with the IAEA, "which calls for notice of major changes 'sufficiently in advance'," the unusually hard-hitting EU statement said. Washington's IAEA ambassador agreed in remarks to reporters.
The United States said Iran's "cat-and-mouse game" with inspectors, its plan for 10 more enrichment sites and snubbing of an IAEA-brokered deal to swap enriched uranium for fuel for a medical isotope reactor would pave the way to stiffer sanctions.
"We hope that Iran will change its current course and seek the path of negotiations. Not doing so leaves the international community no choice but to pursue further, deeper sanctions to hold Iran accountable," said U.S. Ambassador Glyn Davies.
Western delegates challenged Iran's assertion that enriching uranium to 20 percent purity was solely to make fuel for the reactor itself, rather than launching itself most of the way down the road to making bomb-grade nuclear fuel.
They said Iran lacked the fuel conversion technology and therefore could not hope to replenish the reactor's imported Argentine fuel stock before it runs out later this year.
Amano has unfurled a blunter IAEA line on Iran, something likely to bolster sanctions proponents, after what Western diplomats said was the reluctance of ElBaradei to confront Tehran due to doubts about the veracity of some intelligence.
At Wednesday's meeting, Iran and the Non-Aligned Movement of developing nations also objected to Amano's omission -- unlike in ElBaradei's reports -- of references to Tehran's denials of wrongdoing and the fact the intelligence has not been verified.
Additional reporting by Sylvia Westall; Editing by Dominic Evans