The United States says Iran will face additional international pressure following release of an International Atomic Energy Agency (IAEA) report that Tehran has expanded its uranium-enrichment activities.  Consultations about further U.N. sanctions against Iran are expected to begin soon.  VOA's David Gollust reports from the State Department.

Officials in Washington are still studying the IAEA report, but say it is clear Iran continues to defy the international community with its nuclear activities and will face additional pressure including tougher sanctions.

The report was issued in Vienna before the Thursday deadline set by the United Nations for Iranian compliance with a sanctions resolution approved March 24, the second such measure since last December.

The report said Iran has neither stopped enriching uranium as demanded by the Security Council, nor has it agreed to any of the transparency measures sought by the U.N. watchdog agency to monitor Iranian nuclear activities.

As such, the IAEA expressed concern about its deteriorating ability to track the Iranian nuclear program that the United States and key allies believe has a secret weapons component.

In a talk with reporters, State Department Deputy Spokesman Tom Casey said the Security Council will have to consider next steps and that in the absence of a sudden policy reversal, Tehran will find itself under increasing pressure from the international community.

Casey said the Bush administration intends to continue a strategy of applying gradually-increasing pressure while leaving open an opportunity for negotiations on the Iranian program.

Casey said while Iranian leaders have been dismissive of the sanctions resolutions to date, they are having a real impact on the country's economy and global standing:

"They are paying the price because of the sanctions that have been imposed, and because of decisions extraneous to that, that banks and individual companies and individual governments are making," he said.  "There is heat that is being applied to the Iranian government.  We think that they are feeling it and they are going to feel more of it in the coming weeks if they continue to stand opposed to the very basic conditions that the international community has set for them."

U.S. officials had said in advance of the report that the five permanent Security Council member countries and Germany, the so-called P5-plus-1, would begin work on a third, harsher sanctions measure if the Thursday deadline was not met.

Casey said he expects discussions among the six powers to begin shortly at the political directors level.

The nuclear issue is expected to be a key issue for Secretary of State Condoleezza Rice and foreign minister colleagues late next week at preparatory talks in Berlin for the summit of the G-8 industrial powers opening in Germany June 6.

Iran insists its nuclear program is entirely peaceful and that it is entitled to develop a complete nuclear fuel cycle for an envisaged network of power reactors.

Spokesman Casey said no one in the world community wants to prevent Iran from having a civil nuclear power program, but there must be assurances that the program is not subverted for weapons purposes.

The P5-plus-1 last year offered Iran a variety of economic and political incentives for suspending its enrichment program and returning to nuclear negotiations.  The United States said it was prepared for open-ended political talks with Iran on all issues of concern to both sides.