Western powers are preparing to push the UN nuclear watchdog's board at its next quarterly meeting to declare Iran in breach of its non-proliferation obligations for the first time in almost 20 years, a move bound to enrage Tehran, diplomats said.
The step is likely to further complicate talks between the United States and Iran aimed at imposing fresh restrictions on Iran's rapidly advancing nuclear programme.
Washington and its European allies Britain, France and Germany, known as the E3, proposed past resolutions adopted by the International Atomic Energy Agency's 35-nation Board of Governors calling on Iran to quickly take steps such as explain uranium traces the IAEA found at undeclared sites.
The IAEA is preparing to send member states its quarterly reports on Iran before the next board meeting, which begins on June 9. One of those will be a longer, "comprehensive" account of issues including Iran's cooperation, as demanded by a board resolution in November, and diplomats expect it to be damning.
"We expect the comprehensive report to be tough, but there were already no doubts over Iran not keeping its non-proliferation commitments," one European official said.
Once that report is issued, the United States will draft a proposed resolution text declaring Iran in breach of its so-called safeguards obligations, three diplomats said. A fourth said the Western powers were preparing a draft resolution without going into specifics.
The text will be discussed with countries on the board in coming days before being formally submitted to the board by the four Western powers during the quarterly meeting as has happened with previous resolutions, diplomats said.
Referring Iran's non-compliance to the UN Security Council
The last time the board took the step of formally declaring Iran in breach of its safeguards obligations was in September 2005 as part of a diplomatic standoff that stemmed from the discovery of clandestine nuclear activities in Iran.
The United States and IAEA now believe Iran had a secret, coordinated nuclear weapons programme that it halted in 2003. Iran denies ever having had a weapons programme and says it is only using nuclear technology for peaceful purposes.
A separate IAEA board resolution passed in February 2006 referred Iran's non-compliance to the UN Security Council, which later imposed sanctions on Iran.
The diplomats said it had not yet been determined at what point the Western powers would seek to have the matter referred to the Security Council, and it is unclear what action if any the Security Council would then take against Iran.
The most immediate effect of a resolution is likely to be on Tehran's talks with the United States and any further nuclear steps Iran decides to take on the ground.
The board has passed all recent resolutions proposed by the Western powers on Iran, and there is little doubt that this one would go through as well. The only question is how large the majority would be. Russia and China have been the only countries to consistently oppose such resolutions.
Iran bristles at resolutions and other criticism of it at the IAEA board, taking steps such as accelerating and expanding its uranium enrichment programme or barring top IAEA inspectors.
It is already enriching uranium to up to 60% purity, which can easily be further enriched to the roughly 90% of weapons grade. It has enough material at that level, if enriched further, for six nuclear weapons, according to an IAEA yardstick.