Mohamed ElBaradei, head of the International Atomic Energy Agency (IAEA), delivered a report on Friday saying UN checks in Iran had been hampered and that Tehran had ignored demands to stop producing nuclear fuel.
Mohammad Saeedi, deputy head of Iran's Atomic Energy Organisation, told state television that Iran wanted the Security Council to pass the case back to the IAEA.
The Additional Protocol to the nuclear Non-Proliferation Treaty allows short-notice inspections of nuclear facilities.
"If the case returns to the agency (IAEA) again, we will begin the section that concerns the Additional Protocol," Saeedi said.
"The enrichment will continue. But ... we will continue implementing the Additional Protocol as a voluntary measure."
ElBaradei's report said the IAEA was "unable to make progress in its efforts to provide assurance about the absence of undeclared nuclear material and activities in Iran".
Matter of concern
"The existing gaps in knowledge continue to be a matter of concern," the report added.
"Any progress in that regard requires full transparency and active co-operation by Iran. These transparency measures are not yet forthcoming."
Western diplomats at the UN have said they plan to present a resolution to the Security Council within a week that would back up the council's demands with legal force.
Saeedi wants the council to
return Iran's case to the IAEA
The US, backed by Britain and France, support imposing limited sanctions on Iran but the other two veto-wielding permanent council members - Russia and China - are reticent.
The US said on Friday that the foreign ministers of the five permanent members will meet, along with Germany, on May 9.
Meanwhile, the Chinese ambassador to the UN said in Chicago on Saturday it could be dangerous to introduce a UN Security Council resolution to force Iran to halt uranium enrichment activities.
Wang Guangya, who presides over the 15-member Security Council this month, would not comment on whether China would veto a Chapter 7 resolution, which Western diplomats have said they will introduce next week.
However, he reiterated the need to find a diplomatic solution to the crisis and said the IAEA was the organisation most capable of ensuring that Iran complies with the NPT.
"If you introduce a resolution not to reinforce the IAEA but to replace it, that is dangerous," Wang said following a talk at the University of Chicago.
"The Iranians are already saying that if this issue is being discussed under Chapter 7, they will drop the NPT like the North Koreans."
Wang: Introducing a resolution
at the UN would be dangerous
Wang said the Security Council could be used to put pressure on Iran to fully co-operate with IAEA inspectors, but said that China, while "concerned", does not characterise the situation as a threat to international security.
A Chapter 7 resolution is invoked to deal with "threats to peace, breaches of the peace, or acts of aggression" and is binding on all UN member states.
"This is a technical issue and I don't think the Security Council as a political organisation would be capable of doing this job," he said.
Responding to comments by George W Bush, the US president, that the international community must present a "common voice" to put pressure on Tehran, Wang said the international community was "united" in its concern but not in the solution.
"Now people are talking about economic sanctions or possibly military actions. If this is being considered I think it will make the effort for a diplomatic solution more difficult," Wang said.
"We have to work together not to let the situation get out of control because Iran is in a region that is already full of problems ... if not handled well the Iranian issue might add fire to the whole region."
Mahmoud Ahmadinejad, the Iranian president, reiterated that Iran would never give up its right to peaceful atomic technology.
"That is our red line, and we will never cross it," he said.