WASHINGTON – Iran has defied a U.N. demand to suspend its uranium-enrichment program and has failed to fully cooperate with international inspectors, the U.N. nuclear-watchdog agency reported Friday.

The report set the stage for a clash between Iran and the U.N. Security Council, and among members of the council on how to end the crisis. The Bush administration said it wanted to work through the council but it’s raised the possibility of working outside it to impose punitive measures against Iran.

Diplomats from the United States, China, Russia, Britain and France – the veto-wielding Security Council members – and Germany planned to meet Tuesday in Paris to try to work out a common strategy.

Iran said it was working with the International Atomic Energy Agency, but also indicated that it might quit cooperating if the Security Council tries to rein it in.

The United States will push for a Security Council resolution that could be enforced by economic sanctions or military action, said John Bolton, the U.S. ambassador to the U.N.

The United States would back “targeted sanctions,” such as restricting the travel of certain Iranian officials or trade in equipment that could be used for civilian or military purposes, Bolton said. Some measures could be taken outside the Security Council, he said.

China’s U.N. ambassador, Wang Guangya, called for diplomacy and said talk of sanctions and military measures was counterproductive.

Russia also has objected to sanctions. Russia needed time to form its position, Deputy Foreign Minister Sergei Kislyak said Friday.

The 15-nation Security Council called on Iran in a nonbinding statement March 28 to suspend its uranium-enrichment work and answer outstanding questions about its nuclear program.

Instead, Iran announced it had enriched uranium to a level sufficient for running a nuclear power station.

The United States and some of its European allies accuse Iran of seeking to develop nuclear weapons under the cover of its energy program. Iran denies it.

President Bush said Friday, “The diplomatic process was just beginning.”

The IAEA report “should remind the Iranians that 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, all of which we’re working hard to convince them not to try to achieve,” Bush said.

Iran told the IAEA it would continue its limited cooperation on nuclear safeguards and that it was willing to resolve the outstanding issues.

It promised to provide a timetable within three weeks. But it said it would cooperate only within the framework of the IAEA.

Iranian President Mahmoud Ahmadinejad on Friday repeated his threat to stop cooperating if the Security Council applies pressure. Ahmadinejad noted that Iran has the right to develop enriched uranium for civilian nuclear reactors under the nuclear Non-Proliferation Treaty, the agreement designed to stop the spread of nuclear weapons.

“If they would resort to playing tricks against us and taking advantage of these regulations that should naturally guarantee our rights, they had better know that the Iranian nation would alter its methods of dealing with these groups and agencies thoroughly,” he said according to the government-run Iran Republic News Agency.

Iran, however, has admitted concealing its nuclear program for 18 years and the IAEA found it to be in violation of the agency’s safeguards agreement.

IAEA Inspector General Mohamed ElBaradei said in his report that it was impossible for IAEA inspectors to answer all questions after three years of inspections.

The report said IAEA tests April 18 “tend to confirm” Iran’s claim that it had used 164 centrifuges to produce low-enriched uranium. The same process, with more centrifuges or a longer duration, produces highly enriched uranium for weapons. Iran ended a more than two-year moratorium on enrichment in January.

Iran plans to install the first 3,000 of a 50,000-centrifuge underground, industrial-scale plant at Natanz beginning late this year. The 3,000 centrifuges would be capable of producing enough highly enriched uranium for a warhead if operated for a year.

According to the report, among the missing information about Iran’s nuclear ambitions are documents that raise questions about its purchases of weapons-related materials from a smuggling ring led by Pakistan’s A.Q. Khan.

One document the IAEA seeks from Iran is about the fabrication of uranium metal, which is used to make warheads.

“Additional transparency measures, including access to documentation, dual use equipment and relevant individuals, are . . . still needed for the agency to be able to verify the scope and nature of Iran’s enrichment program, the purpose and use of the dual use equipment and materials purchased by the PHRC (Physics Research Center), and the alleged studies which could have a military nuclear dimension,” the report said.

Because there are gaps in what the IAEA knows, it’s “unable to make progress in its efforts to provide assurance about the absence of undeclared nuclear material and activities in Iran,” it said.

In February, Iran stopped allowing the IAEA to enter some military sites and to visit nuclear sites on short notice.

Joseph Cirincione, a nonproliferation expert at the Carnegie Endowment for International Peace, said the report contained no big surprises about the content or pace of Iran’s program.