International Atomic Energy Agency chief Mohamed ElBaradei also said the United States should negotiate directly with Iran if talks reach the stage of focusing on security guarantees to Tehran in exchange for concessions on its nuclear program.
The end of Wednesday's meeting of the 35-member board of the IAEA set the path for Security Council action. ElBaradei said his staff would send his report on Iran's nuclear program to the council by Thursday.
Under terms agreed to by the five permanent Security Council members, that would formally lead to the start of council deliberations. Those are meant to cajole Iran into cooperating with an IAEA probe seeking to banish fears Tehran may be seeking nuclear arms and persuade it to re-impose a freeze on uranium enrichment.
That process can produce both nuclear fuel and the fissile core of warheads.
"The next stop for the Iran stalemate is the U.N. Security Council," CBS News foreign affairs analyst Pamela Falk said. "Until specific steps are discussed, the five Permanent Members of the Security Council are in agreement that Iran must cease its nuclear programs and open its plants to inspectors."
The United States and its European allies said Iran's nuclear intransigence left the world no choice. The Security Council could impose economic and political sanctions on Iran, but such a move is considered unlikely because of opposition from Russia and China, which have strategic and commercial ties with Tehran and wield veto power in the U.N. body.
Watch Falk discuss the Iran stalemate
"Iran's threats are serving to galvanize the world powers," said Falk, "creating more unity in their believe that Iran must be restrained."
While the United States hopes for at least a binding Security Council resolution calling on Iran to comply, it might have to settle for a milder statement.
Wednesday's meeting began with both Iran and the nations opposing its enrichment plans sticking to their positions.
"The United States has the power to cause harm and pain," said Ali Asghar Soltanieh, a senior Iranian delegate to the IAEA. "But the United States is also susceptible to harm and pain. So if that is the path that the U.S. wishes to choose, let the ball roll."
He did not elaborate but suggested Iran was awaiting additional American moves.
Diplomats accredited to the meeting and in contact with the Iranians said the statement could be a veiled threat to use oil as an economic weapon. Iran is the second-largest producer within the Organization of Petroleum Exporting Countries, and a boycott could target Europe, China or India.
The White House dismissed the rhetoric out of Tehran.
"I think that provocative statements and actions only further isolate Iran from the rest of the world," White House press secretary Scott McClellan told reporters traveling with President Bush to the Gulf Coast. "And the international community has spelled out to Iran what it needs to do."
John Bolton, America's ambassador to the United Nations, said Iran's comments showed how much of a menace it was.
"Their threats show why leaving a country like that with a nuclear weapon is so dangerous," he told The Associated Press in a phone call from Washington.
Bolton classified the Iranian comments as "reflecting their determination to acquire weapons."
At an OPEC meeting in Vienna, Iran petroleum minister Sayed Kazem Vaziri Hamaneh deflected questions about Iran's threat, saying: "Ask the one who said that."