Foreign Minister Tzipi Livni said on Wednesday that "the international community needs to focus on preventing Iran from obtaining nuclear weapons."

Livni made the remarks in response to the International Atomic Energy Agency's report that was released earlier Wednesday, which slams Iran for expanding its nuclear activities and for disregarding UN Security Council demands to scrap its uranium enrichment program.

The foreign minister maintained that the report "shows that time is of the essence, therefore it is critical that the entire world unite and recognize that we must not deviate from this vital goal."

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The Prime Minister's Office issued a statement saying that Israel "strongly frowns upon the ongoing deterioration of the level of Iran's cooperation with IAEA supervisors." However, the PMO maintained that there is no mention in the report that Iran has reached a high level of uranium enrichment.

The report from Mohamed ElBaradei, the head of the UN's nuclear watchdog
agency, also faulted Tehran for "blocking IAEA efforts to probe suspicious nuclear activities, saying that meant it could not provide assurances about ... the exclusively peaceful nature of its atomic program." And, in new and worrying phrasing, it expressed concern about its deteriorating understanding of unexplored aspects of the program, despite four years of a probe sparked by revelations that Tehran had been clandestinely developing enrichment and other nuclear activities that could be used to make weapons for nearly two decades.

The report, one of a series keeping the IAEA's 35-nation board and the
Security Council up to date on the agency's monitoring efforts, was posted simultaniously on the IAEA internal website and handed over to the president of the Security Council for distribution among its members.

While the reports finding that Iran was expanding enrichment instead of
curtailing it is not surprising, it is important as a trigger for possible new UN sanctions, the third since the first were imposed Dec. 23.

With the council's latest deadline for Iranian compliance ending on Thursday, the report could set the stage for within days for consultations on new council penalites.

A senior UN diplomat, who demanded anonymity because he was not authorized to publicly comment on the report, suggested that the shrinking hole left for inspections by Iran's rollback of previous monitoring agreements was potentially as worrying as its defiance on enrichment.

The brevity of the 4-page report indirectly reflected the lack of progress agency inspectors had made clearing up unresolved issues, among them; Iran's posession of diagrams showin how to form uranium into warhead form; unexplained uranium contamination at a research facility; information on high explosives experiments that could be linked to a nuclear program and the design of a missile re-entry vehicle.

The major world powers will insist Iran halts all nuclear enrichment and rejects a compromise put forward by the head of the U.N. nuclear watchdog, U.S. Undersecretary of State Nicholas Burns said on Wednesday.

At the White House, a spokesman called the new report by International Atomic Energy Agency "a laundry list of Iran's continued defiance of the international community and shows that Iran's leaders are only furthering the isolation of the Iranian people."

The State Department's Burns said: "We are not going to agree to accept limited enrichment, to accept that 1,300 centrifuges can continue spinning at their plant at Natanz."

U.S. ambassador: Iran must stop arming militias in Iraq
U.S. Ambassador to Iraq Ryan Crooker, reiterating U.S. accusations against Iran, called on Tehran Wednesday to cease its alleged support of armed militias in Iraq.

Speaking to journalists in Baghdad, Crooker accused Iran of both supporting armed groups and smuggling weapons, and added that instability in Iraq would undermine security in the entire region.

The U.S . official refused however to comment on the ongoing row over
Iran's nuclear program, saying that a planned meeting between U.S.
and Iranian officials on the coming Monday would cover only the
question of security in Iraq.

Iraqi representatives are also to take part in the Monday meeting,
Crooker added, in response to fears previously expressed by Iraqi
politicians that the United States and Iran would make deals on Iraq
to the exclusion of the Iraqis themselves.

Crooker also said the U.S. government was prepared to negotiate with
armed groups should the latter decide to take part in the Iraqi
political process. He named as an exception the international
terrorist network Al-Qaida.

Iran is suspected of supporting Iraqi Shiite militias such as the
Mahdi army of radical cleric Moqtaba al-Sadr. According to the United
States, al-Sadr has been resident in Iran for several months, an
allegation his followers deny.