The Los Angeles Times reports the administration is more deeply divided on the issue than it was on the war in Iraq.
The administration disagreed mainly on when and how to pursue regime change in Iraq, but was mostly in sync on the need to get rid of Saddam Hussein, the newspaper reports.
Officials are not agreed, however, on the need to topple the leadership in Tehran.
A White House meeting to discuss Iran policy was reportedly scheduled for this week but has been postponed. Top officials dismissed the meeting as a low-level discussion, and said no policy change was under consideration.
However, a sharpening of rhetoric against Iran since the start of the war in Iraq signals at least a new level of concern about Tehran's alleged nuclear ambitions, suspected support for terrorism and designs on postwar Iraq.
According to the Times, some officials and advisers are pushing for regime change in Tehran accomplished through support for internal dissident or even covert military action.
No one is discussing outright war, the paper reports.
The State Department, CIA and National Security Council oppose regime change, believing that the West can work with the reformist government of President Mohammad Khatami.
Iran has long been on the U.S. list of state sponsors of terrorism and was one of the three countries named in President Bush's "axis of evil" speech" last year.
But since late March, administration officials have strengthened their public statements against Tehran.
There were more complaints Friday.
Coalition forces radio in Iraq warned of "fundamentalists under foreign command" who "have entered Iraq with aggressive intent and it is in the interest of the Iraqi people to help the coalition," according to Agence France Presse.
It was an apparent reference to Iranian agents. The U.S. has blamed Iran for stoking anti-U.S. fervor in the occupied country.
The top commander of U.S Marines in Iraq, Lieutenant General James Conway, warned there are a number of Iraqis with ties to Iran who might later pose a threat to stability. But he adds so far, they're "playing by the rules."
Meanwhile, Iran was quick to deny a report it was holding a top al Qaeda official, but it said it had not yet identified the members of Osama bin Laden's terror group it had detained.
Last week, U.S. officials, including Defense Secretary Donald Rumsfeld, accused Iran of harboring senior members of al Qaeda.
American officials have said intelligence reports suggest that al Qaeda operatives in Iran had a role in the Riyadh suicide bombings of May 12 that killed 25 bystanders. Saudi Arabia has said it plans to seek the extradition of any Saudis who may be among al Qaeda members held in Iran.
The pan-Arab paper Asharq al-Awsat reported Friday that Iran had arrested Suleiman Abu Ghaith, the Kuwaiti-born spokesman for al Qaeda who appeared on a video tape in late 2001 warning Americans of a "storm of airplanes" and advising Muslims to avoid living in "high buildings or towers" in the United States and Britain.
Iranian Vice President Muhammad Ali Abtahi told The Associated Press he had no information that Abu Ghaith was in Iranian custody. The vice president is responsible for legal and parliamentary affairs.
"I categorically reject that Asharq al-Awsat report that Suleiman Abu Ghaith is in our custody," Foreign Ministry spokesman Hamid Reza Asefi told the AP.
Asefi reiterated that Iran still had not identified its al Qaeda detainees. But he did not explain how he was sure that Abu Ghaith was not among them.
"When we have not identified those al Qaeda in our custody, we cannot confirm the report," he replied when pressed further.
Also Friday, Russia's atomic energy minister suggested that Washington join Moscow in building a nuclear power plant in Iran that for years has been a major source of friction in U.S.-Russian relations.
The Bushehr reactor project has dogged U.S.-Russia relations since Moscow landed the deal in 1995. The reactor is scheduled to become operational in mid-2005.
Moscow has shrugged off U.S. concerns that the light-water reactor help Tehran acquire a nuclear bomb. The issue is expected to figure high on the agenda when President Bush and Russian President Vladimir Putin meet in St. Petersburg this weekend.
Atomic Energy Minister Alexander Rumyantsev said other nations, including the United States, could have the opportunity to participate in the construction at Bushehr, where Iran ultimately wants to build six reactors.
"There is enough room for everyone," Rumyantsev said, according to the ITAR-Tass news agency.
Rumyantsev reaffirmed Moscow's view that Iran should sign an additional agreement with the U.N. International Atomic Energy Agency to put all Tehran's nuclear facilities under closer watch.
At the same time he said only the IAEA has the authority to accuse Iran of breaking the international nuclear nonproliferation regime.
Washington wants the agency to declare Iran in violation of the Nuclear Nonproliferation Treaty for secretly developing a uranium enrichment plant in Natanz in southern Iran.