"Even the idea of people talking about using force ... it would be catastrophic, it would be an act of madness, and it would not solve the issue."
ElBaradei also said Iran could be running close to 3,000 uranium-enriching centrifuges by the end of next month, a number that agency officials have described as the point of no return in the start of a large-scale programme.
Iran says it aims to refine uranium only to the low level required to produce energy for civilian purposes, not the high level that could then be used in the manufacture of nuclear weapons.
Thursday's meeting in the Austrian capital again made no headway in resolving the crisis with the main obstacle being Iran’s refusal of demands by the UN security council that it abandon its programme.
The US and Israel have not ruled out military action to destroy Iran's nuclear infrastructure if negotiations backed up by UN sanctions do not work.
ElBaradei has proposed a "time-out" in which Iran would suspend uranium enrichment and the UN would hold off on further sanctions.
"It would be good if Iran today would stop building additional centrifuges and installing [them] in Natanz. I think that could be a first step toward a time-out or freeze for peace," ElBaradei said.
ElBaradei said Iran has "no urgency in building [enrichement] capacity right now" since it did not have any nuclear power plants running.
Earlier on Thursday, Iran's ambassador to the IAEA warned it may reconsider basic co-operation with IAEA inspectors if harsher sanctions were imposed by the UN.
Ali Asghar Soltanieh said Tehran had mastered the means to enrich uranium and world powers must accept that fact instead of trying to stop the work through sanctions.
ElBaradei said Iran was indeed making advances towards an enrichment industry after years of research-level activity.
"They have 1,700 to 2,000 centrifuges right now," he said, adding that Iran was on target to have about 3,000 running by the end of July. That would be enough to yield material for one bomb in a year if operated non-stop.
But he said inspectors had not yet been able to verify whether the centrifuges were running at optimal speed or whether some might have crashed, as they have a number of times before.
ElBaradei stressed that current intelligence showed Iran remained "years" away from the capability to assemble nuclear explosives, assuming it wanted them, and then repeated earlier assessments of a 3-8 year time frame.