IAEA says Iran building up atom program, defying U.N.

VIENNA (Reuters) - The U.N. nuclear watchdog said on Wednesday Iran was stepping up its uranium enrichment program as U.S. warships maneuvered off Iran's coast, highlighting concerns over Iranian nuclear ambitions and involvement in Iraq.

Iran's defiance of another 60-day deadline set by the Council when it imposed a second set of sanctions on March 24 will expose Tehran to tougher penalties over its nuclear work, which the West fears is a front for assembling atom bombs.

"Iran has not agreed to any of the required transparency measures, which are essential for the clarification of certain aspects of the scope and nature of its nuclear program," said a confidential International Atomic Energy Agency (IAEA) report obtained by Reuters.