U.S. Ambassador John Bolton and British Ambassador Emyr Jones Parry were responding to a report from the International Atomic Energy Agency that said Iran had ignored a March council statement demanding it suspend uranium enrichment, a process used in making bombs as well as electric power.

"The point is to enhance international pressure on Iran, to show just how isolated they are," Bolton said. "There is still time for Iran to reverse the policy it is pursuing."

Jones Parry said his delegation would introduce a draft resolution on the IAEA report by the middle of next week. But the initial resolution will not threaten sanctions or hint at military force.

Instead it will put directives by the 35-member IAEA board of governors and the March council statement into a U.N. resolution under Chapter 7 of the U.N. Charter, which makes it legally binding. It would also call Iran's nuclear program a threat to "international peace and security," Bolton said.

Iran will be given a "short time" to comply, after which Western powers would consider targeted sanctions against individuals and possible restrictions on trade, Bolton said.

"They have to comply or the Security Council is prepared to take other steps," he said.

If that fails, Bolton said action could be taken "within or without the Security Council."

The Bush administration has raised the prospect of organizing a coalition that could impose sanctions, although some Europeans are reluctant to do so without U.N. agreement.

Chapter 7 makes council resolutions mandatory under international law. It allows for sanctions or even war, but a separate resolution would be required to specify either step.