ElBaradei, speaking as the International Atomic Energy Agency here began a meeting that could lead to punitive UN Security Council action against Iran, said there was a "flurry of activities" trying to get Tehran and the European Union back to the negotiating table.

"The sticking point remains the question of the centrifuge-related R and D (research and development)," he said.

"That issue is still again being discussed this week and I'm still very much hopeful that in the next week or so an agreement could be reached."

Talks between Iran and the European Union on guaranteeing that the Islamic republic is not seeking nuclear arms broke off last August when Tehran resumed enrichment activities toward making what can be nuclear reactor fuel or atom bomb material.

A resumption of Iran-EU negotiations could head off Security Council action over fears that Iran is secretly working on making nuclear weapons.

Iran, which claims it has the right to enrich uranium for nuclear reactor fuel as part of a peaceful energy programme, began actual enrichment in February but on a small-scale, which it says is only for research.

ElBaradei said there were "contacts going on trying to reach agreement on modalities for Iran and the Europeans to go back to the negotiating table.

"There has been lots of progress on many elements of that agreement. I think there is agreement that industrial-scale enrichment should be suspended.

"I think there is an agreement that Iran should continue to implement the additional protocol and ratify it as early as possible," he said, referring to the protocol on wider IAEA inspections.

The United States and Europe have called on Iran to bow to IAEA demands to suspend all enrichment-related activities, including research.

But Iran's ambassador to the IAEA, Ali-Asghar Soltanieh, reitered Tehran's defiance. "We will not show any flexibility on research and development," he told AFP in Vienna.

Iran wants to be able to do this small-scale work while pledging not to do full-scale enrichment, diplomats said.

Tehran's top nuclear negotiator Ali Larijani said Sunday that it would not freeze small-scale nuclear fuel work even if referred to the world body.

"Going to the Security Council will certainly not make Iran go back on research and development," Larijani told reporters in Tehran, adding that the Islamic republic would retaliate to any such move by pressing ahead with large-scale uranium enrichment.

The IAEA's 35-nation board of governors will hear ElBaradei's assessment on Iran, which is then to go to the Security Council.

ElBaradei said he was concerned that after three years of IAEA investigation there were still "uncertainties" about Iran's nuclear programme.

But he said Iran was continuing to cooperate. "We are getting some transparency but not with the magnitude and the speed expected. I hope Iran will continue to show transparency to be able to clarify the past."

The IAEA board reported Iran on February 4 to the Security Council but left a month open for diplomacy until the world body gets ElBaradei's report.

"I think the Security Council will have to have a serious discussion about what the next steps will be," US Secretary of State Condoleezza Rice said at the weekend, but added there was no need to rush to sanctions.