Nuclear Watchdog Reports Iran Expanded Nuclear Program

The violation of a 60-day deadline demanding an end to all nuclear fuel work in exchange for negotiations on trade incentives could mean more sanctions against the country.

"Iran has not agreed to any of the required transparency measures, which are essential for the clarification of ... the nature of its nuclear program," said the IAEA report.

After the report's release, the United States deployed nine warships, including two aircraft carriers, into the Persian Gulf, an area of international waters off the coast of Iran.

Iran has stated that its nuclear activity is for power generation only and denies any plans for nuclear arms, but the international community has voiced concerns over the capability of the program.

The report found that an underground facility in Natanz, Iran, is creating uranium gas for 1,312 centrifuge machines to make enriched uranium.

The IAEA indicated a need for better intelligence on the situation and said "the agency's level of knowledge of certain aspects of Iran's nuclear related activities has deteriorated" because Iran ceased providing crucial information to the IAEA more than a year ago.

The United States has led the call for Iran to cease enrichment activity. A White House spokesman called the new report "a laundry list of Iran's continued defiance of the international community" and that "Iran's leaders are only furthering the isolation of the Iranian people," reported Reuters.

U.S. and European envoys also are set to meet with IAEA head Mohamed ElBaradei, who has made controversial comments suggesting Iran should be allowed to keep some uranium enrichment capacity as a compromise.

ElBaradei told the New York Times in May that "the focus should be to stop them from going to industrial scale production."

U.S. Undersecretary of State Nicholas Burns said Wednesday the major world powers would reject any such compromise and continue to demand a complete halt to enrichment activity.