The head of the UN atomic agency called Thursday for diplomatic "urgency" in the Iranian nuclear standoff, even as Tehran signalled its continued defiance of UN Security Council demands to suspend key activities.

"All countries, and the IAEA, are willing to find a diplomatic solution. If there is political will we can reach agreement," said International Atomic Energy Agency chief Yukiya Amano.

"There is an opportunity to resolve the Iranian nuclear issue diplomatically. Now is the time for all of us to work with a sense of urgency and seize the opportunity for a diplomatic solution," he said.

His comments came as the IAEA's board of governors met in Vienna for a session dominated, as usual, by Iran's nuclear programme.

Robert Wood, US envoy to the IAEA, said Washington would take the rare step of pressing for the board to refer Iran to the UN Security Council if no progress was made before the next board meeting.

"If by March Iran has not begun substantive cooperation with the IAEA, the United States will work with other board members to pursue appropriate board action, and would urge the board to consider reporting this lack of progress to the UN Security Council," Woods said, according to prepared remarks.

With Iran feeling the pinch from sanctions and US President Barack Obama freed from the constraints of a lengthy re-election campaign, conditions appear favourable to make progress in the long-running crisis.

The P5+1 powers -- the US, China, Russia, Britain, France and Germany -- said after a meeting in Brussels last week that they want talks with Iran "as soon as possible". This may happen as early as December.

But it is far from clear whether the P5+1 will want to sweeten an offer, made in talks in May and June, that for Tehran stopped short of offering sufficient sanctions relief.

Signals coming out of Iran meanwhile indicate that Tehran is not any readier to meet P5+1 and Security Council demands to suspend its most sensitive nuclear activities, most notably uranium enrichment.

Iran's nuclear chief Fereydoon Abbasi Davani, who said in September that the IAEA had been infiltrated by saboteurs and "terrorists", said Wednesday Iran would continue "with force" to expand its activities.

This is in spite of four rounds of sanctions imposed by the Security Council, which in combination with additional Western restrictions began to cause real problems for the Iranian economy this year.

Abbasi Davani also said Iran would "soon test" its new heavy-water nuclear reactor at Arak, which Western nations fear could produce weapons-grade plutonium.

Parallel diplomatic efforts between the IAEA and Iran, focused on what the agency calls "overall, credible" evidence of past weapons research work, are meanwhile set to resume on December 13 in Tehran.

Amano said Thursday that after several rounds of fruitless talks this year, including his visit to Tehran in May, he did not want another instance of "going around in circles".

The IAEA's latest report on November 16 said Iran would soon be able to triple its production of 20-percent enriched uranium to 45 kilos (100 pounds) per month after fully fitting out its Fordo facility, a key site dug into a mountain where, the agency said, final machinery has been installed but is not yet operational.

Israel's so-called "red line" for military action is thought to be when Iran has produced around 250 kilos. That would be enough for one nuclear weapon, if further enriched -- although such a move would be quickly detected by the IAEA, which constantly monitors Fordo.

But the IAEA also found that of the around 230 kilos of enriched uranium produced so far, 95 kilos have been converted for use as fuel for a reactor producing nuclear medicines -- supporting Iran's argument that its programme is for peaceful means.

The rate of conversion has however slowed dramatically, indicating possible technical problems, and once Fordo is fully up and running, Iran will be producing far more material than its civilian facilities need, experts say.

Iran's envoy to the IAEA, Ali Asghar Soltanieh, said Thursday that Tehran is "ready to find a face-saving solution (for the West)... provided that the other parties, the US and the EU, cope with the reality.

"The reality is very simple. Iran is master of enrichment technology and will never ever suspend its enrichment," he said. "All activities are under the IAEA (inspections). They have not found a smoking gun.... They have not found even a gram of uranium diverted to military purposes."