A new report by the UN nuclear watchdog says Iran has shown new openness about nuclear advances which had earlier been off-limits to UN monitors, but not enough to prove it was not making bombs.
In response, Washington said on Friday that it had "no confidence" in Iran's intentions and that it would pursue further UN sanctions against Tehran.
Six major, made up of the five UN Security Council permanent members plus Germany, powers are due to mee in Washington on Monday for fresh talks on how to make Iran give up its contested uranium enrichment activities.
Nicholas Burns, the US state department's number three, said foreign ministry officials would review a proposed third UN sanctions resolution against Iran.
The International Atomic Energy Agency (IAEA) report, released on Friday, painted a more positive picture of Iranian co-operation than before.
But it also confirmed that Iran was testing technology that could give it the means to enrich uranium much faster.
Iran insists its nuclear programme is entirely peaceful.
'Full nature'
The IAEA said it was still not in a position to determine the "full nature of Iran's nuclear programme" which several Western powers fear could be used to make nuclear weapons.
Presenting the report in Vienna, Mohammed ElBaradei, the IAEA chief, said his agency had made "quite good progress" in clarifying outstanding issues but said this progress was still not enough.
The findings, which said Iran had failed to clear up all outstanding questions by an agreed February deadline, may be branded negative on balance by Western powers and spur the UN Security Council to adopt more sanctions as early as next week.
Al Jazeera's John Terret, reporting from New York, said that according to a senior member of the British delegation, the mood within the Security Council was that despite the positive spin ElBaradei put on the report, the issue of more sanctions against Iran is still on the agenda.
Terret said: "It is worth stressing that when the the [US] National Intelligence Estimate report came out, stating Iran's nuclear programme had stopped in 2003, momentum towards 'punishing' Iran slowed dramatically."
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Saeed Jalili, Iran's most senior nuclear negotiator, said that the IAEA report is a "success" for the country.
But the US said the international community could have "no confidence" that Iran's nuclear programme was for peaceful purposes and that it would pursue further UN sanctions against Tehran.
Kate Starr, a spokeswoman for the US national security council, said: "The report notes that Iran continues and has even expanded its enrichment activities during the past year.
"While we welcome the progress the IAEA has made on some issues, until Iran meets its obligations, the international community can have no confidence that Iran's nuclear program is peaceful.
"We again urge Iran to suspend such activities and make a full disclosure to the IAEA. At this point, we are continuing to move forward with our Security Council partners on a third sanctions resolution."
Iranian 'success'
Alaeddin Boroujerdi, head of the Iranian parliament's national security and foreign policy commission, said the UN report would undermine any US push for more UN sanctions against Tehran.
He said: "In regards to the (IAEA) report ... about Iran's peaceful nuclear activities and the resolution of some unclear issues, the road will not be paved for the Americans to issue a new resolution against Iran in the (UN) Security Council.
Boroujerdi further said: "Issuing such (sanctions) resolutions not only has no technical and legal basis but also the Security Council should apologise to the Iranian nation because of its behaviour and announce the end of studying Iran's nuclear issue."
Ali Larijani, Iran's former nuclear negotiator, said that there was no justification for the Security Council's concern about Tehran's nuclear programme or further sanctions against it.