"I think that you are going to see some significant additional sanctions imposed by the international community, assuming that the Iranians don't change course and agree to do the things they agreed to at the beginning of October," Gates told a group of US soldiers in Kirkuk, Iraq.

"Iran is stiffing the international community on some of the proposals that they agreed to at the beginning of October," he said. "That has brought the international community, including the Russians and the Chinese, together in a way they haven't been."

He was alluding to a UN-brokered deal under which Iran would have exported part of its low-enriched uranium, which would have been further refined and returned as fuel for a research reactor in Tehran. Iran rejected the deal.

Western governments suspect the Islamic republic is developing technology to enrich uranium to even more highly refined levels to covertly develop a nuclear bomb.

Iran says it wants to develop a civil energy programme and has rejected attempts to force it to stop enrichment or farm out enrichment work abroad to fuel the research reactor.

Russia and China have been the most dovish of veto-wielding permanent members of the UN Security Council regarding further sanctions on Iran, always arguing in favour of diplomacy to get Iran to change its stance.

The United States, another permanent council member along with Britain and France, has never ruled out force. Gates repeated Washington's long-standing position on Friday.

"You never take any option off the table " but "any military action would only buy some time, maybe two to three years," he said.

Gates arrived in Iraq on a suprise visit on Thursday, following a trip to Afghanistan where Washington is ramping up its military commitment.

He was speaking as European leaders were preparing to warn Iran that its failure to respect international obligations and refusal to negotiate over its nuclear programme must be met with a tough response.

In a draft statement at a summit in Brussels, the leaders of the 27 European Union Nations announce their readiness to back new UN sanctions, which the United States, Britain and France are pushing for.

"Iran's persistent failure to meet its international obligations and Iran's apparent lack of interest in pursuing negotiations require a clear response, including through appropriate measures," the draft document said.

"Consistent with the dual-track approach, the European Union would support action by the UNSC (Security Council) if Iran continues not to cooperate with the international community over its nuclear programme."

Should the United Nations move towards punitive action against Iran, the draft statement said, "the European Union stands ready to take the necessary steps to accompany this UNSC process."

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