After what he called a "very candid discussion" with EU foreign ministers, Powell told a news conference in Brussels the text offered by Britain, France and Germany was not tough enough on Tehran's non-compliance with its treaty obligations.
He said he was pleased Iran now appeared to be moving in the right direction in cooperating with the International Atomic Energy Agency (IAEA).
But he added: "We have some reservations about the resolution drafted that we have seen. We'll be in discussion with our EU colleagues and other members of the IAEA as to whether or not the resolution is strong enough to convey to the world the difficulties we've had with Iran over the years. The fact of the matter is that Iran has been in non-compliance."
The IAEA board meets on Thursday to discuss a report on Iran's nuclear programme, which Washington says conceals efforts to develop atomic weapons.
Iran insists its programme is entirely civilian and for peaceful purposes but admits having failed to disclose uranium enrichment activities and plants.
The US has said it wants the IAEA to find Iran in breach of the treaty and report it to the UN Security Council for possible sanctions.
"We have some reservations about the resolution drafted that we have seen"
US Secretary of State
But diplomats said the text offered by London, Paris and Berlin was milder, did not mention the Security Council and only spoke of past "failures to meet safeguards obligations".
"I am pleased that Iran seems to be moving in the right direction now but we can't be satisfied until Iran has demonstrated that all the programmes it had been pursuing have now been made known to the international community and they are now being brought to a halt," Powell said.
It remained to be seen whether the 31-member IAEA board would be able to reach a consensus resolution, he said.
EU foreign policy chief Javier Solana, who said on Monday that Iran had been honest about its nuclear programme, vaunted the Europeans' policy of "constructive engagement" with Iran.