Iran Defies U.N. On Nukes

The International Atomic Energy Agency said Friday that Iran had enriched uranium and persists with related activities in its nuclear program in defiance of the U.N. Security Council.

Shortly after the IAEA announcement, President Bush said "the world is united and concerned" about Iran's suspected desire to build nuclear weapons and that he will work with other countries to achieve a diplomatic solution to the crisis.

Mr. Bush said the IAEA statement was an important statement: "It reminds the nations of the world that there is an ongoing diplomatic effort to convince the Iranians to give up their nuclear weapons ambitions."

Meanwhile, U.N. ambassador John Bolton said the United States "is ready to take action in the Security Council" to confront Iran's nuclear program.

Bolton said Friday's report by U.N. nuclear experts shows Tehran "has accelerated its efforts to acquire nuclear weapons," although the report itself stops short of that declaration.

Bolton said Iran's "long status as the world's leading state sponsor of terrorism" underscores the findings that Tehran is, in fact, enriching uranium. And he said the United States will pursue a resolution that would allow international enforcement through sanctions or military action.

The eight-page report, obtained by The Associated Press, said that after more than three years of an IAEA investigation, "the existing gaps in knowledge continue to be a matter of concern."

"Any progress in that regard requires full transparency and active cooperation by Iran," said the report, written by IAEA chief Mohamed ElBaradei.

The finding set the stage for a showdown in the U.N. Security Council, which is expected to meet next week and start a process that could result in punitive measures against the Islamic republic.

A Chinese ambassador to the U.N. tells CBS News that most Security Council members want to see a diplomatic solution. And President Bush said in Washington Friday after meeting with the leader of Muslim country Azerbaijan, said he desired "to solve this diplomatically and peacefully," CBS' Alison Harmelin reports.

Later, in a Rose Garden press conference, Mr. Bush said the world "is united and concerned about their desire to have not only a nuclear weapon but the capacity to make a nuclear weapon or the knowledge to make a nuclear weapon."

But Iranian President Mahmoud Ahmadinejad said no Security Council resolution could make Iran give up its nuclear program.

"The Iranian nation won't give a damn about such useless resolutions," Ahmadinejad told thousands of people Friday in Khorramdareh in northwestern Iran.

"Today, they want to force us to give up our way through threats and sanctions but those who resort to language of coercion should know that nuclear energy is a national demand and by the grace of God, today Iran is a nuclear country," state-run television quoted him as saying.

In one of the few new developments in the IAEA's more than three-year investigation, the report concluded that Iran used undeclared plutonium in conducting small-scale separation experiments.

"The agency cannot exclude the possibility ... that the plutonium analyzed by the agency was derived from source(s) other than declared by Iran," the report said. Plutonium separation is one of the suspect "dual use" activities that could be used for a weapons program.

But the agency was stonewalled by Iran's refusal to give more information on other key issues — details of its centrifuge programs that are used to enrich uranium, information on drawings that show how to form fissile uranium into warheads, and apparent links between Iran's military establishment and what it says is a civilian nuclear program.

Iran is maintaining publicly that it intends to use any nuclear capability for energy, not weapons.

However, when former State Department Mark Fitzpatrick, a nuclear proliferation expert, returned from a trip to Iran recently unconvinced by the energy argument, CBS News' Vicki Barker reports.

The Security Council is likely to consider punitive measures against the Islamic republic. While Russia and China have been reluctant to endorse sanctions, the council's three other veto-wielding members say a strong response is in order.

Secretary of State Condoleezza Rice won broad support from NATO allies for a tough diplomatic line on Iran.

However, NATO foreign ministers meeting in Sofia, Bulgaria, did not offer any specific threat of sanctions against Iran, in part to avoid a rift with Russia and China.

"On Iran, there was unanimity," Spanish Foreign Minister Miguel Angel Moratinos told reporters. "Although the clear message to the Iranian authorities is one of firmness, we have to continue with the diplomatic path."

Rice said it was time for the Security Council to act if the world body wished to remain credible.

"The Security Council is the primary and most important institution for the maintenance of peace and stability and security and it cannot have its word and its will simply ignored by a member state," Rice said.

The United States, France and Britain say that if Tehran does not meet the deadline, they will make the enrichment demand and other conditions compulsory and they want punitive measures to stay on the table.

"The international watchdog agency report sets the stage for Security Council action next week," said CBS Foreign Affairs analyst Pamela Falk. "U.S. negotiators are determined to keep the Council steering the diplomatic ship to demand that Iran stop its nuclear program, even if it means small steps."