For "each action there is a reaction, prompt reaction by Iran and that will continue"," Iran's ambassador to the International Atomic Energy Agency, Ali Asghar Soltanieh, told reporters at a meeting of the International Atomic Energy Agency's 35-nation board of governors.

The UN Security Council has imposed two sets of sanctions since December in a bid to get Iran to halt uranium enrichment -- which can make fuel for reactors or for a bomb -- and to cooperate with an IAEA investigation over concerns Iran seeks nuclear weapons.

IAEA chief Mohamed ElBaradei reported Wednesday that the agency's ability to monitor Iran's nuclear work is "deteriorating" due to the reduced Iranian cooperation.

ElBaradei also told the board that Iran is still expanding uranium enrichment work, in defiance of the Security Council.

The IAEA board wrapped up its debate Thursday after both the United States and Europe warned that new UN sanctions against Iran loomed.

US ambassador Gregory Schulte told reporters: "We want negotiations. We want negotiations that get us to a diplomatic settlement."

"But for Iran to enter those negotiations, it needs to listen to the board of governors. It needs to listen to the Security Council and it needs to suspend those activities causing such international concern," Schulte said.

Iran refuses to suspend enrichment, saying it has the right to a peaceful nuclear programme under the Non-Proliferation Treaty (NPT).

The Islamic state has reacted to sanctions already imposed by stopping voluntary cooperation with IAEA inspectors.